Pairs Trading Workshop in Hong Kong - forex trading trendline strategy

Pairs Trading Workshop in Hong Kong ~ forex trading trendline strategy

For my readers in Asia, I will be conducting a pairs trading workshop in Hong Kong on March 10-11. This workshop is organized by the Technical Analyst magazine and is similar to the one I gave in London last year.
However, I have added a few useful insights based on audience feedback. As always, no prior knowledge of Matlab or advanced statistics is assumed. The numerous in-class exercises should be sufficient to bring your Matlab programming skills up to speed.

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My pairs trading workshop in London - simple forex trading strategies work

My pairs trading workshop in London ~ simple forex trading strategies work

I will be holding a 2-day, hands-on, pairs trading workshop in London, October 14-15. It will be held in conjunction with the Automated Trading 2009 conference organized by the Technical Analyst magazine. Please see details here.
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Selecting tradeable pairs which measure to use - free forex trading strategies that work

Selecting tradeable pairs which measure to use ~ free forex trading strategies that work

A guest blog by Paul Farrington

One of the most important factors in statistical arbitrage pairs trading is the selection of the paired instruments.  We can use basic heuristics to guide us, such as grouping stocks by industry in the anticipation that stocks with similar fundamental characteristics will share factor risk and tend to exhibit co-movement.  But this still leaves us with potentially thousands of combinations.  There are some statistical techniques we can use to quantify the tradeability of a pair: one approach is to calculate the correlation coefficient of each pairs return series. Another is to consider cointegration measures on the ratio of the prices, to see if it remains stationary over time.

In this article I briefly summarise the alternative approaches and apply them to a universe of stock pairs in the oil and gas industry.  To measure how effective each measure is in real world trading, I back test the pairs using a simple means reversion system, then regress the generated win rate against the statistical results.  Some basic insights emerge as to the effectiveness of correlation and cointegration as tools for selecting candidate pairs.

Please visit http://www.paulfarrington.com/research/Selecting%20tradeable%20pairs.htm for details of my methodology and results.
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SHARP RALLY IN YEN PAIRS TRADING GAINS AHEAD - forex binary options ultimatum trading system

SHARP RALLY IN YEN PAIRS TRADING GAINS AHEAD ~ forex binary options ultimatum trading system

The major crosses for the Japanese Yen have rallied sharply in the last few days, with gains of between 500 and 1000 Pips seen for the USD, EURO, GBP and the CHF. Although some of these have started to pullback, the setups on their respective Daily Charts suggest that this could be temporary ahead of further losses for the Japanese Yen.

The USD JPY led the way with a strong breakout from a Range setup on August 20.


DAILY CHART- RANGE SETUP

DAILY CHART- BREAKOUT

The GBP JPY followed with a breakout of its own of over 1000 Pips from a Pennant setup.



DAILY CHART- PENNANT SETUP

 

DAILY CHART- BREAKOUT

 


In breaking the Resistance of this Pennant, however, the pair exceeded its Monthly Range (see Trading Manual). This means that it is expected to pullback or move sideways for awhile before resuming the uptrend. As long as the bullish signal given after this pause is strong and clear, traders will be able to capture between 100 and 200 Pips.

The EURO JPY also started to break out of its large Pennant with a move of 500 Pips. It did this with a breakout from a small Range at the Support  and has now pulled back to the Resistance of the Pennant. The reason for the pullback has to do with the Breakout Equivalent (B.E.) of this Range being hit which is the target that all breakouts from Consolidations go towards before they pause to either resume the trend or reverse.


DAILY CHART- PENNANT & UPTREND

DAILY CHART- BREAKOUT & BREAKOUT EQUIVALENT

 

 



If the breakout is going to continue in favour of the EURO, we will have to see a strong U-turn and bullish signal following this test of the Resistance. It is then likely to start a trend that takes us back to the high of 145,67 set on December 27, 2013.

Breakout Equivalent and Monthly Range targets are important technical price points to take into consideration when trading the Daily Chart. They act as strong profit targets for our trades as well as major pullback points for all the Currency Pairs in the Forex. An awareness of these areas greatly enhances your profitability as you anticipate sharp reversals in the market and identify the best exit points for your trades.


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• Daily Analysis of Currency Pairs;

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• A Currency Trading Experience focused entirely on Making Money;

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Duane Shepherd 

(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

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