[walterw]

So... you want to trade forex ? well its a hell diferent aproach than futures, thats for sure... when I just started with the idea of getting into forex, I really didnt realize how diferent this market would be... at some point I was almost discouraged with my mixed results on my research...

What I didnt really realized is that as it happens with futures, forex also has its "internals".... those spy tools that can give you that extra edge...

As you all know trading futures can be so much easier when you use certain internals like tick, trin, etc etc... you call it... but this "internals" give you a hint of whats going on...

Same happens on forex when you introduce "Inter-Currency Analisis" to the ecuation...

Its simple all currencies are related one to another... they just cant change so much without affecting other currencies, because they are all related in pairs... they all form part of a "tissue" that has some certain flexibility but at last it will come back to an organic equilibrium...

Lets give a little simple example so you can grasp what I am talking about here... lets say we have a super up move on the USD/JPY ok.. what this means is that the USD is becoming more strong than the JPY... simple as that... now the USD (the currency itself, not the pair) its becoming strong... so what can we expect then to happen on the other pairs that contain the USD if the USD itself its becoming strong ?.... mmmm well, welcome to the "Inter-Currency Analisis" world... now let me grab a good argentinean cup of coffee... I keep going on the next post. cheers The Chimp.

[walterw]

If you start to look at the currency by itself... how she is becoming strong or weak in relation to other currencies... then you start to see the big picture in forex... you start to have an incredible edge... you have an "internal" that its telling you what REALLY its happening on the market... you just simply can not ignore the true condition of a currency you are pretending to trade... its so fool to ignore whats the true "health" of this currency in relation to all the other currencies...

KNOWING the true health of a currency its the begining of a TRUE validated CONTEXT from wich you can build infinite alternatives to your trading... BUT you need first a good solid context and that context I beleive is "Inter-Currency Analisis"...

When you do "Inter-Currency Analisis" you are basicly creating a solid foundation to build a super skyscraper on it... its so solid it can handle just about any weight on it...

So this information its key to any forex trader... now gathering this information may becme a very sofisticate procedure if not hard actually, thats the reason many traders just dont have this info because its actually pretty hard to gather it in a fashion where you can see it simple and usable..

Thats where I actually found some edge on this soft I will show you, but lets go first into the intrinsecal concepts... next post

[walterw]

As you know a pair is formed by two currencies... if this pair will trend, it will actually happen because one currency its becoming strong and the other its becoming weak... now thats obvious on the considered pair... how about if I tell you that the currency "itself" its becoming strong or weak in relationship to other pairs... so lets say I have EUR/USD and I have the info that the EUR is becoming very strong in relationship to other pairs and happens to be also that the USD its becoming very weak in relationship to other currencies... so now I KNOW I have a strong EUR in relationship to other pairs and a weak USD in relationship to other pairs... not just between the EUR/USD but between the rest of the market...

Well you can expect a super up move more likely...

Remember that the currency that starts the name of the pair if strong expect up move if weak expect down move... the second currency on the name has to have oposite condition (strength/ weaknes) from now on I will call TOP to the first currency on the name and BOTTOM to the second one on the name... Example : EUR/USD EUR = TOP USD= BOTTOM ,

if TOP is strong and BOTTOM is weak, expect UP move...

if TOP is weak and BOTTOM is strong, expect DOWN move...


So now we want to know how strong or weak each of the currencies that conform a pair is in relationship to other currencies... I call that "Inter-Currency Analisis"

cheers Walter.

[walterw]

Just in case you didnt read it please check this disclaimer here http://www.traderslaboratory.com/for...imer-3942.html

There is a lot of softwares out there trying to do some "Inter-Currency Analisis" but with no success at all, they just cant compile all the information in a way that may be usable... if the final information cant be really used to put in a trade its just futile...

I found this soft that does an outstanding job doing some excellent "Inter-Currency Analisis" name is Topgun software for forex (leveragefx) (will not post link here, you may find it on the net)... the edge it has its the ability to do a great job showing "Inter- Currency Analisis" in a tradeable manner...

This brilliant fellows created a tool called Fxmultimap (FXMM) wich gathers the information of several diferent pairs to gauge the intrinsecal strength / weakness of a given currency...

Its all plotted on a histogram where you can very easy see how things are doing in terms of strength/weakness...

Example chart :




so we will be looking at the wonders of this tools on the next few days... and I will create diferent threads where I will present some scalping aproaches (classic stuff) that will be used on the "context" of fxmm analisis...


basicly the histograms above is the final calculation of the relation between several currencies... so the histogram its not another ordinarie histogram calculated from ohlc of the above bars, NO... its calculated from the relationshgip between other cureencies... COOL STUF MY FRIENDS chimp doesnt consume bad bananas... he like GOOOOD ones... I see ya tomorrow.. cheers The Chimp.

[brownsfan019]

Walter,
Good post as it makes sense (to me at least). As someone that's never gotten into fx trading seriously, my questions on your post here would be:

1) How can you watch/track if a specific currency itself is getting strong or weak? In other words, how can you tell if the USD itself is strong or weak?

2) Knowing what you said in the thread and assuming one could use that trade in real-time, wouldn't computers arb this before you could possibly make a profitable trade? We'll use futures as an example since that's what I know and you've traded them as well - it's a very common knowledge that there are computer arb programs out there that arb back and forth between stocks and the futures. Does not the same idea hold true in fx where if a computer program sees the USD moving in 1 currency to jump over to the other currency(ies) and get in?

The main question here being - how is a trader able to use your idea here in real-time to make trades? That's what it's all about, right?

I hope you know I'm just trying to see where this is headed and any practical real-time use of it. As you'll see around here, the forum has some new blood and some don't respond to kindly when you ask for practical application of an idea. You know me better than that, but it has been awhile, so just wanted to let you know that my questions and comments are purely educational in nature.

[brownsfan019]

note - your post w/ an actual chart helps a lot.



Still curious how this is used in real-time to make a trading decision though. Looking forward to more from the chimp!

PS
You may want to ask James to create a little sub-group for your threads so they stay together and you can moderate it.

[walterw]

Nice Brown... glad to see ya man ¡¡ being some time... well basicly I will start showing the interpretation of the below histograms... they basicly show us how each currency that conforms the pair is (stong/weak) in relation to the rest of the market... this will create a "frame" of context.... from there on I will start to explain some setups (nothing new actually) that happens on the price pane but now considering our histograms context... so it will take some time to put this entire idea to the final product... add the fact that I will like to see others ideas as we interact, so it will be a very nice journey... off course Brown, I will apreciate your inputs in candles here to this superb "Inter -Currency Analisis" context... lets go wild ¡¡ jejeje cheers Walter.

[walterw]

Originally Posted by brownsfan019 »

note - your post w/ an actual chart helps a lot.



Still curious how this is used in real-time to make a trading decision though. Looking forward to more from the chimp!

PS
You may want to ask James to create a little sub-group for your threads so they stay together and you can moderate it.

The Chimp corner ? jejeje that would be cool...