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Download indicators kase permission stochastic smoothed

kase permission stochastic smoothed + alertskase permission stochastic smoothed + alerts.mq4

 

 

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//+——————————————————————+
//|                                    kase permision stochastic.mq4 |
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#property copyright “mladen”
#property link      “[email protected]

#property indicator_separate_window
#property indicator_buffers  2
#property indicator_color1   Magenta
#property indicator_color2   DimGray
#property indicator_width1   2
#property indicator_width2   1
#property indicator_minimum  0
#property indicator_maximum  100
#property indicator_level1   25
#property indicator_level2   75
#property indicator_levelcolor DimGray

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extern int  pstLength     =   9;
extern int  pstX          =   5;
extern int  pstSmooth     =   3;
extern int  smoothPeriod  =  10;
extern int  smoothPhase   = 100;

//
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extern bool  alertsOn        = false;
extern bool  alertsOnCurrent = true;
extern bool  alertsMessage   = true;
extern bool  alertsSound     = false;
extern bool  alertsEmail     = false;

//
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//
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double pstBuffer[];
double pssBuffer[];
double wrkBuffer[][5];
double trend[];

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//
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int init()
{
IndicatorBuffers(3);
SetIndexBuffer(0,pstBuffer); SetIndexLabel(0,”Stochastic”);
SetIndexBuffer(1,pssBuffer); SetIndexLabel(1,”Signal”);
SetIndexBuffer(2,trend);

pstSmooth    = MathMax(pstSmooth,1);
smoothPeriod = MathMax(smoothPeriod,1);

IndicatorShortName(“Kase permission stochastic smoothed (“+pstLength+”,”+pstX+”)”);
return(0);
}
int deinit() { return(0); }

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//
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#define TripleK   0
#define TripleDF  1
#define TripleDFs 2
#define TripleDS  3
#define TripleDSs 4

//
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//
//
//

int start()
{
double alpha = 2.0/(1.0+pstSmooth);
int lookBackPeriod = pstLength*pstX;
int counted_bars   = IndicatorCounted();
int i,r,limit;

if(counted_bars<0) return(-1);
if(counted_bars>0) counted_bars–;
limit = MathMin(Bars-counted_bars,Bars-1);
if (ArrayRange(wrkBuffer,0) != Bars) ArrayResize(wrkBuffer,Bars);

//
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for(i=limit,r=Bars-i-1; i>=0; i–,r++)
{
double min = Low [iLowest (NULL,0,MODE_LOW ,lookBackPeriod,i)];
double max = High[iHighest(NULL,0,MODE_HIGH,lookBackPeriod,i)]-min;
if (max>0)
wrkBuffer[r][TripleK] = 100.0*(Close[i]-min)/max;
else  wrkBuffer[r][TripleK] =   0.0;
if (i==(Bars-1))
{
wrkBuffer[r][TripleDF] = wrkBuffer[r][TripleK];
wrkBuffer[r][TripleDS] = wrkBuffer[r][TripleK];
continue;
}
wrkBuffer[r][TripleDF] =  wrkBuffer[r-pstX][TripleDF]+alpha*(wrkBuffer[r][TripleK]-wrkBuffer[r-pstX][TripleDF]);
wrkBuffer[r][TripleDS] = (wrkBuffer[r-pstX][TripleDS]*2.0+wrkBuffer[r][TripleDF])/3.0;

//
//
//
//
//

wrkBuffer[r][TripleDSs] = iSma(TripleDS ,3,r);
pssBuffer[i]            = iSmooth(wrkBuffer[r][TripleDSs],smoothPeriod,smoothPhase,i, 0);
wrkBuffer[r][TripleDFs] = iSma(TripleDF ,3,r);
pstBuffer[i]            = iSmooth(wrkBuffer[r][TripleDFs],smoothPeriod,smoothPhase,i,10);

//
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//

trend[i] = trend[i+1];
if (pstBuffer[i] > pssBuffer[i]) trend[i] =  1;
if (pstBuffer[i] < pssBuffer[i]) trend[i] = -1;
}

//
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if (alertsOn)
{
if (alertsOnCurrent)
int whichBar = 0;
else     whichBar = 1;
if (trend[whichBar] != trend[whichBar+1])
if (trend[whichBar] == 1)
doAlert(“up”);
else  doAlert(“down”);
}

//
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//
//
//

return(0);
}

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//
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double iSma(int forDim, int period, int pos)
{
double sum = wrkBuffer[pos][forDim];
for(int i=1; i<period; i++) sum += wrkBuffer[pos-i][forDim];
return(sum/period);
}

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//
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void doAlert(string doWhat)
{
static string   previousAlert=”nothing”;
static datetime previousTime;
string message;

if (previousAlert != doWhat || previousTime != Time[0]) {
previousAlert  = doWhat;
previousTime   = Time[0];

//
//
//
//
//

message =  StringConcatenate(Symbol(),” at “,TimeToStr(TimeLocal(),TIME_SECONDS),” Kase PS trend changed to “,doWhat);
if (alertsMessage) Alert(message);
if (alertsEmail)   SendMail(StringConcatenate(Symbol(),”Kase PS “),message);
if (alertsSound)   PlaySound(“alert2.wav”);
}
}

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//
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double wrk[][20];

#define bsmax  5
#define bsmin  6
#define volty  7
#define vsum   8
#define avolty 9

//
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//
//
//

double iSmooth(double price, double length, double phase, int i, int s=0)
{
if (ArrayRange(wrk,0) != Bars) ArrayResize(wrk,Bars);

int r = Bars-i-1;
if (r==0) { for(int k=0; k<7; k++) wrk[0][k+s]= price; for(; k<10; k++) wrk[0][k+s]= 0; return(price); }

//
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double len1 = MathMax(MathLog(MathSqrt(0.5*(length-1)))/MathLog(2.0)+2.0,0);
double pow1 = MathMax(len1-2.0,0.5);
double del1 = price – wrk[r-1][bsmax+s];
double del2 = price – wrk[r-1][bsmin+s];

wrk[r][volty+s] = 0;
if(MathAbs(del1) > MathAbs(del2)) wrk[r][volty+s] = MathAbs(del1);
if(MathAbs(del1) < MathAbs(del2)) wrk[r][volty+s] = MathAbs(del2);
wrk[r][vsum+s] =    wrk[r-1][vsum+s] + 0.1*(wrk[r][volty+s]-wrk[r-10][volty+s]);

//
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//
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//

double avgLen = MathMin(MathMax(4.0*length,30),150);
if (r<avgLen)
{
double avg = wrk[r][vsum+s];  for (k=1; k<avgLen && (r-k)>=0 ; k++) avg += wrk[r-k][vsum+s];
avg /= k;
}
else avg = (wrk[r-1][avolty+s]*avgLen-wrk[r-toInt(avgLen)][vsum+s]+wrk[r][vsum+s])/avgLen;

//
//
//
//
//

wrk[r][avolty+s] = avg;
if (wrk[r][avolty+s] > 0)
double dVolty = wrk[r][volty+s]/wrk[r][avolty+s]; else dVolty = 0;
if (dVolty > MathPow(len1,1.0/pow1)) dVolty = MathPow(len1,1.0/pow1);
if (dVolty < 1)                      dVolty = 1.0;

//
//
//
//
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double pow2 = MathPow(dVolty, pow1);
double len2 = MathSqrt(0.5*(length-1))*len1;
double Kv   = MathPow(len2/(len2+1), MathSqrt(pow2));

if (del1 > 0) wrk[r][bsmax+s] = price; else wrk[r][bsmax+s] = price – Kv*del1;
if (del2 < 0) wrk[r][bsmin+s] = price; else wrk[r][bsmin+s] = price – Kv*del2;

//
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//
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double R     = MathMax(MathMin(phase,100),-100)/100.0 + 1.5;
double beta  = 0.45*(length-1)/(0.45*(length-1)+2);
double alpha = MathPow(beta,pow2);

wrk[r][0+s] = price + alpha*(wrk[r-1][0+s]-price);
wrk[r][1+s] = (price – wrk[r][0+s])*(1-beta) + beta*wrk[r-1][1+s];
wrk[r][2+s] = (wrk[r][0+s] + R*wrk[r][1+s]);
wrk[r][3+s] = (wrk[r][2+s] – wrk[r-1][4+s])*MathPow((1-alpha),2) + MathPow(alpha,2)*wrk[r-1][3+s];
wrk[r][4+s] = (wrk[r-1][4+s] + wrk[r][3+s]);

//
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//
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return(wrk[r][4+s]);
}
int toInt(double value) { return(value); }
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Terminology forex : S


S&P

Standard and Poor’s ( S&P ) is currently one of the Big Three players in the credit rating industry.
In 1941 Standard Statistics ( publisher of sovereign debt and bonds ratings ) merged with Henry Varnum Poor, the publisher of “History of the Railroads and Canals of the United States,” which is one of the first attempts at compiling financial details of the U.S. railroads.Today, S&P is not only known for its ratings, it’s also closely watched for its ratings on market indices ( ex. S&P 500, S&P/Case-Shiller home price index ).

 

 

 

 

 

 

 

 

Safe haven

These are Assets that are considered relatively low-risk investments and are usually bought up in times of uncertainty. They are typically low-paying but are deemed stable by market participants.
Two of the most popular safe haven assets in the forex market are the U.S. dollar and the Japanese yen. Oftentimes, when risk aversion is in play, these two currencies rally against their counterparts.

 

 

 

 

 

 

 

 

  Same day transaction

A transaction in which the transaction matures in the same trading day.

 

 

 

 

  Sao Tome, Principe Dobras

The currency of Sao Tome, Principe. Currency code ( STD )

 

 

 

 

 

 

 

 

 

 

Scalping

Scalping or short-term trading involves making dozens or hundreds of trades a day, trying to scalp a small profit from each trade by exploiting the bid-ask spread.Scalping works because not all currency pairs remain on the move at all times. Scalpers generate profits from these non-moving pairs or turn around and sell for a profit those pairs that fluctuate in the positive direction. This way, they receive a small profit. This profit quickly adds up.Some advantages to scalping include less exposure to risk ( because it doesn’t have the time in one position to be effected ), easier-to-obtain moves and more opportunities to realize a small profit. Of course, there are no perfect strategies. Many Forex trading platforms prohibit scalping and will charge a fee for making more than ten trades in a one day. Therefore, it would benefit the trader to find out if this practice is allowed on their particular platform.However, for a short-term trading strategy to be profitable, it requires larger capital. Leverage is also necessary to magnify profits from small price moves.It is important to have an exit strategy set up before trying to scalp, as it would only take one large loss to eliminate an entire day’s positive profits. Utilizing a one-minute chart will give the trader a better idea of what trades to make and which to shy away from.

 

 

 

 

 

 

 

 

 

 

 

 

Seborga Luigini

The currency of Seborga. Currency code ( SPL )

 

 

 

 

 

 

 

 

Services PMI – United Kingdom

Release schedule : 8:30 ( GMT ); monthly, on the first working day after the reporting month.
Revisions schedule : Minor revisions are made monthly, going back 2 or 3 months.
Source of report : Chartered Institute of Purchasing and Supply and NTC Research
Web Address : http://www.cips.org
Address of release : http://www.cips.org/Page.asp?PageID=177&CatID=42

 

 

 

 

 

 

 

 

 

 

  Settlement Period

Time allotted in which it takes the two parties of a transaction to satisfy the transaction’s obligations.

 

 

 

 

 

 

 

 

Seychelles Rupees

The currency of Seychelles. Currency code ( SCR )

 

 

 

 

 

 

 

 

 

 

Sharpe ratio

Derived by William Sharpe in 1966, the Sharpe ratio describes how much excess return you receive for the added volatility that you tolerate for holding on to a risky asset.
It is calculated this way:
S( x ) = ( rx-Rf )/StdDev( x )
where:
x = investment
rx= ave. rate of return of x
Rf= best available rate of return of a risk-free security ( ie. Currencies )
StdDev ( x ) = standard deviation of rx
Robopip uses the Sharpe ratio to measure the risk tolerance of a system.
It helps him solve for the additional compensation above a certain level that the system should yield for each additional unit of risk. Basically, the higher the ratio, the better the system is.

 

 

 

 

 

 

 

 

 

 

 

 

 

Spot Trade

The transaction of a currency or commodity for immediate delivery.

 

 

 

 

 

 

 

 

 

  Spinning Top

Candlesticks that have small bodies with upper and lower shadows that exceed the length of the body. A very good reversal signal and can be any color. Spinning tops signal indecision. The smaller the body, the less direction the market has.

Spinning-top

 

 

 

 

 

 

 

 

 

 

 

Spain

Spain, officially the Kingdom of Spain, is located in Southwestern Europe, bordering the Mediterranean Sea, North Atlantic Ocean, Bay of Biscay, and Pyrenees Mountains.In 1999 Spain joined the European Monetary Union ( EMU ) and adopted the euro in place of its former currency, the peseta.

Economy
Spain hasthe fourth largest economy in the euro zone and the 13th largest in the world.
The Spanish economy is highly dependent on its services and industry sector. Germany and France are Spain’s largest import and export partners.
In late 2007 a significant decline in consumer spending and an oversupply in the housing market took its toll on the construction industry. After almost 15 years of positive GDP growth, Spain officially entered into a recession in Q2 2008.The government tried to revive the economy through stimulus spending, extended unemployment benefits, and loan guarantees. Unfortunately, the efforts only resulted to a government budget deficit more than three times the size of the euro zone’s limit. It also didn’t prevent the unemployment rate from rocketing above 20%. Spain soon became vulnerable to debt contagion from other financially troubled euro zone economies.Meanwhile, the Spanish banks’ high exposure to the collapsed real estate market also took its toll on Spain’s growth prospects. The government restructured the savings bank sector and provided capital to institutions, but in Q2 2012 the Spanish government was left with no choice but to formally ask the European Union for bailout money for the banking sector.
Financial Leaders
Head of State: King Juan Carlos I
President of the Government: Mariano Rajoy
Minister of Economy and Competitiveness: Luis de Guindos
Minister of Finance and Public Administration: Cristobal Montoro
Bank of Spain Governor: Luis Maria Linde

 

 

 

 

 

 

 

 

 

 

 

  South Korean Won

The currency of South Korea. Currency code ( KRW )

 

 

 

 

 

 

 

Somalia Shillings

The currency of Somalia. Currency code ( SOS )

 

 

 

 

 

 

 

 

 

Society for Worldwide Interbank Telecommunications

Belgian-based company that provides the global electronic network for settlement of most forex transactions. Also known as SWIFT.

 

 

 

 

 

 

 

 

 

SNB Quarterly Monetary Policy Assessment

Release schedule : Whenever the bank feels like it
Source of report : Swiss National Bank
Web Address : http://www.snb.ch/e/index3.html
Address of release : http://www.snb.ch/e/publikationen/publi.html

 

 

 

 

 

 

 

 

  Singapore Dollars

The currency of Singapore. Currency code ( SGD )

 

 

 

 

 

 

 

 

 

 

Shōichi Nakagawa

Definition:
The current Minister of Finance of Japan
Shōichi Nakagawa was born in Hokkaidō, Japan in 1953. He graduated from the law faculty of the University of Tokyo in 1978. Nakagawa has previously held the posts of Minister of Economy, Trade and Industry and Minister of Agriculture, Forestry and Fisheries.

 

 

Shoichi_Nakagawa

 

 

 

 

 

 

Short position

A position in which the base currency is sold. It is beneficial when a price declines.

 

 

 

 

 

 

 

 

Shadow

When referring to candlesticks:
The thin lines poking above and below the body display the high/low range and are called shadows. The top of the upper shadow is the “high”. The bottom of the lower shadow is the “low”.

 

 

 

 

 

 

 

 

Settlement Risk
The chance that one of the two parties of a transaction cannot fulfill the terms of the transaction. May lead to principal risk.

 

 

Candlestick-anatomy

 

 

 

 

 

Settlement

Actual physical exchange of one currency for another.

 

 

 

 

 

 

 

 

 

 

Sentiment Analysis

Sentiment Analysis is the art of not following the bandwagon. It effectively focuses on identifying the patterns of movement investors take on a subjective basis. The theory goes that when a crowd is leaning too far in one direction, it is a sign that a change is about to occur.Traders who utilize sentiment analysis look to investors to see what they are talking about, and how they are reacting to the market. In order to see what investors are talking about, those who research investor sentiment conduct surveys asking them what they believe the current market outlook is. They then act contrary to the results: if less than 25% of the investors surveyed are confident in the future profitability of a market, sentimental analysts will often increase a bet in the market with the expectation that a buying opportunity might be near.
To find out how investors are feeling, sentiment analysts look for indicators such as proprietary bank flow, COT data, and other special research like MarketVane. If the actions of investors seems to indicate that a currency will rise, those who use sentiment analysis will often sell, preparing for a fall in price instead.

 

 

 

 

 

 

 

 

 

  SDR

Special Drawing Right. A standard basket of five major currencies in fixed amounts as defined by the IMF.

 

 

 

 

 

 

 

 

 

 

 

 Saudi Arabia Riyals

The currency of Saudi Arabia. Currency code ( SAR )

 

 

 

 

 

 

 

 

 

 

 

 

 

Samoa Tala

The currency of Samoa. Currency code

 

 

 

 

 

 

 

 

 

  Saint Helena Pounds

The currency of Saint Helena. Currency code ( SHP )

 

 

 

 

 

 

 

  Sadakazu Tanigaki

Sadakazu Tanigaki is the Japan Finance Minister, taking office on September 20th, 2004.
Mr. Tanigaki has previously held positions as the chairman of the National Public Safety Commission and Industrial Revival minister in Prime Minister Junichiro Koizumi’s previous cabinet.

 

 

Tanigaki

 

 

 

 

 

 

 

 

Shooting Star

A single candle pattern that can appear in an uptrend. It opens higher, trades much higher, then closes near its open. It looks just like the Inverted

Hammer except that it is bearish. A shooting star can mark a top but is often retested.

 

Shooting-star

 

 

 

 

 

 

 

 

 

 

 

Short Squeeze

A short squeeze happens when there is excess demand and a lack of supply for a particular financial security.What happens is that due to the excess demand, prices continue to rise rapidly. Traders holding short positions try to cover their positios ( i.e. close their positions ), which can only be done by by buying. With more and more traders looking to buy, we normally see an extended rally as prices go higher and higher. In this sense, all the “shorts” are squeezed.In the forex market, a short squeeze normally happens after a strong sharp move and we see a reversal.For example, EUR/USD went on a long term down trend. At a certain point, some traders may feel that the euro is undervalued, making it a good investment. As more and more buyers enter the market, traders holding short euro positions decide it would be best to close out their positions or potentially suffer losses. This leads to more and more traders buying the euro, and all the short positions getting squeezed out of the market.

 

 

 

 

 

 

 

 

 

 

Sierra Leone Leones

The currency of Sierra Leone. Currency code ( SLL

 

 

 

 

 

 

 

 

 

 

 

 

Slippage

The difference between the expected fill price and the actual fill price.
High probably of slippage may occur in highly volatile markets ( i.e. during news or economic releases. )

 

 

 

 

 

 

 

 

 

 

 

Slovenia Tolars

The currency of Slovenia. Currency code ( SIT )

 

 

 

 

 

 

 

 

 

 

 

SNB Three-Month Target Libor Rate

Release schedule : Whenever the bank feels like it
Source of report : Swiss National Bank
Web Address : http://www.snb.ch/e/index3.html
Address of release : http://www.snb.ch/e/geldpolitik/geldpol.html

 

 

 

 

 

 

 

 

 

 

 

 

Solomon Islands Dollars

The currency of the Solomon Islands. Currency code ( SBD )

 

 

 

 

 

 

 

 

 

 

 

South African Rand

 

The currency of South Africa. Currency code ( ZAR )

 

 

 

 

 

 

 

 

 

 

 

Sovereign Debt

Sovereign debt is a financial liability of a national government. Sovereign debt usually refers to bonds which are denominated in foreign currencies. National governments are usually forced to take on sovereign debt when inflation is high or when exchange rates are unstable. Because the debt needs to be paid in a foreign currency, there is the risk that the national government cannot pay the debt come repayment time, which makes the yield of sovereign debt expensive.

 

 

 

 

 

 

 

 

 

 

 

Speculating

In the financial world, speculating can be described as the act of making an investment in a financial asset, hoping to make a profit when the asset appreciates ( or depreciate, when short selling )over time. In layman’s terms, a speculator will aim to “buy low and sell high ( or sell high and buy back at a lower price when shorting! ).
In the forex markets, retails traders are speculating when they try to make profit when one currency appreciates versus another currency.

 

 

 

 

 

 

 

 

 

 

 

Spot price

Also known as the current market price.

 

 

 

 

 

 

 

 

 

 

 

 

 

Spread betting

Spread betting is a type of speculation on the outcome of an event that involves betting on the price movement of an asset. A spread betting broker quotes prices for the bid and offer/spread, traders bet whether the underlying stock price will be lower than the bid or higher than the spread. In spread betting the investor doesn’t own the underlying stock, he just speculates on the price movement of the stock.

 

 

 

 

 

 

 

 

 

 

 

 

Sri Lanka Rupees

The currency of Sri Lanka. Currency code ( LKR )

 

 

 

 

 

 

 

 

 

 

Sovereign Debt

Sovereign debt is a financial liability of a national government. Sovereign debt usually refers to bonds which are denominated in foreign currencies. National governments are usually forced to take on sovereign debt when inflation is high or when exchange rates are unstable. Because the debt needs to be paid in a foreign currency, there is the risk that the national government cannot pay the debt come repayment time, which makes the yield of sovereign debt expensive.

 

 

 

 

 

 

 

 

 

 

 

Sterling

Slang for the British Pound. Currency code ( GBP )

 

 

 

 

 

 

 

 

 

 

 

 

Stochastic

Stochastic is an indicator used in technical analysis. Stochastic compares closing prices in a market to the high and low prices for that market over a certain period of time.Stochastic is calculated by taking the lowest low price and the highest high price for a number of previous trading periods, usually fourteen. The difference between the current closing price and the lowest low is divided by the difference between the highest high and lowest low, and the result is multiplied by 100. The product, expressed as a percentage, is considered to be the stochastic oscillator. Three varieties of this oscillator exist–fast, slow, and full–each applying a different transformation to the value of the basic stochastic oscillator.Stochastic can be used to determine when a market is overbought or oversold. According to technical analysis, when the stochastic oscillator rises above 80%, the market is overbought, and when the oscillator drops below 20%, the market is oversold. Thus stochastic can be thought of as strong selling or buying signals, respectively.When using stochastic, foreign exchange traders need to take into account the fact that the forex market, being a twenty-four hour market, has no closing prices. Forex traders typically use the price at the time of the New York Stock Exchange’s close as the forex market’s closing price, since the volume of trading drops off shortly after the close of the NYSE.

 

 

 

 

 

 

 

 

 

Stop order

An order sent to a broker which becomes a market order when the market reaches the specific price stated. In volatile ( or fast ) markets, slippage may occur.Stop orders are normally used to take the trader out of a trade in the event the market goes against his/her position.

 

 

 

 

 

 

 

 

 

  Sudan Dinars

The currency of Sudan. Currency code ( SDD )

 

 

 

 

 

 

 

 

 

 

Support

A level at which a currency has trouble falling below.

 

 

 

 

 

 

 

 

 

 

 

 

 

Support levels

Indicates a certain price high and low at which a given exchange rate will correct itself.

 

 

 

 

 

 

 

 

Surplus

Excess in the balance of trade, balance of payments, or government budgets.

 

 

 

 

 

 

 

 

SVME Manufacturing PMI

Release schedule : 7:30 ( GMT ); monthly, on the first business day of the following month
Revisions schedule : Revisions for the past few releases usually occur every month.
Source of report : Swiss Association of Purchasing and Materials Management
Web Address : http://www.svme.ch/
Address of release : Unknown

 

 

 

 

 

 

 

 

 

  Survey of Manufacturing – Canada

Release Schedule : 8:30 AM ( EST ); monthly, in the middle of each month
Source of Report : Statistics Canada
Web Address : http://www.statcan.ca/start.html
Address of Release : http://www.statcan.ca/english/Release/index.htm

 

 

 

 

 

 

 

 

  Suriname Guilders

The currency of Suriname. Currency code ( SRG )

 

 

 

 

 

  Supply and Demand

Supply refers to the amount of an asset that is available while demand is the quantity of an asset that people are willing to buy.As supply of an asset increases, its value declines. Conversely, as supply of an asset decreases, its value rises. As demand for an asset increases, its value rises. Conversely, as demand for an asset decreases, its value declines.Since this principle applies to the currency market, plenty of traders look at supply and demand for a particular currency at a given point in time to figure out whether that currency’s value will rise or decline.One way to gauge supply and demand is to picture a seesaw with all the fundamental factors affecting that currency. For example, when an economic report either increases demand or reduces supply for the US dollar, place that fundamental factor on the left side of the seesaw. When an economic event either decreases demand or increases supply for the US dollar, place that fundamental factor on the right side of the seesaw. If there are more factors on the left side, then the seesaw would tilt upwards and the US dollar’s value should rise. On the other hand, if there are more factors on the right side, then the seesaw would tilt downwards and the US dollar’s value should drop.
This way, traders are able to take note of all the recent fundamental factors that are affecting a particular currency. This is helpful in assessing whether that currency is performing relatively well.

 

 

 

 

 

  Strategists

Strategists are traders who anticipate upcoming reports and their impact on price action. They usually trade the news and come up with trade setups based on whether they think the actual figures will come in worse or better than expected. Because of that, strategists are a good source of trade ideas, especially for short-term trades.

 

 

 

 

 

 

 

 

Stop-loss order

A limit order in which a trade is closed when a specified price is reached causing a loss. Used to limit amount of losses in trades.

 

 

  Stocks

Stocks or equities refer to partial ownership of a company’s assets and profits. If you own a stock of a particular company, you are entitled to a proportional share of its profits. Stocks of companies can be bought and sold in stock markets, such as the New York Stock Exchange.

 

 

 

 

 

 

 

 

Stick Sandwich

 

A bullish reversal pattern with two black bodies surrounding a white body. The closing prices of the two black bodies must be equal. A support price is apparent and the opportunity for prices to reverse is quite good.

Stick-sandwich

 

 

 

 

 

 

 

Stagflation

Definition
As the name suggests, stagflation is a period in time when there is a combination of high inflation and economic stagnation. In essence, it is characterized by rising unemployment and declining business production while the prices of goods and services get higher. Both stagnation and inflation magnify each other, causing economic conditions to worsen further.Currency Impact One of the worst things that can occur to a currency is the effect of stagflation. It leaves very little room for central banks to move because it cannot raise interest rates enough to combat rising prices. When prices rise disproportionately to interest rates, the value of the domestic currency depresses. This, in turn, reduces the purchasing power of consumers. As such, foreign exchange markets usually see stagflation as negative for the domestic currency.

 

 

 

 

 

Squawk box

A speaker connected to a phone on a broker’s desk.

 

 

 

 

 

 

 

Swaziland Emalangeni

The currency of Swaziland. Currency code ( SZL )

 

 

 

 

 

 

  Sweeping

The process of converting Profits and Losses in another currency into U.S. dollars at the end of each trading day.

 

 

 

 

 

 

 

Swissy

Slang for the Swiss franc. Currency code ( CHF )

 

 

 

 

 

 

Swiss Industrial Production

Release schedule : 7:15 ( GMT ); quarterly
Revisions schedule : Revisions can be significant
Source of report : Swiss Federal Statistical Office
Web Address : http://www.bfs.admin.ch/bfs/portal/en/index.html

 

 

 

 

 

 

Symmetrical Triangle

A Symmetrical Triangle is a method of pattern trading based on a continuation pattern. Continuation patterns also include Ascending Triangles, Descending Triangles, Wedges, Flags, Rectangles and Pennants and are essentially technical patterns that are expected to lead to the continuation of an existing trend. Continuation patterns are considered a powerful trading tool as they usually result in extremely low risk trading opportunities and spectacular returns.A Symmetrical Triangle is most often known as a bullish continuation pattern whose technical targets are derived by adding the largest vertical height of the triangle to the ultimate breakout level, however Symmetrical Triangles can also be regarded as neutral. The Symmetrical Triangle in reverse ( or downtrend ) would be classed as bearish.Generally a Symmetrical Triangle results when there is an area of indecision within the marketplace where buyers are attempting to push prices higher but are met with resistance by sellers, the market reaches a pause as the direction of prices is questioned, typically because the forces of both sellers and buyers are equal.A series of rallies and sell-offs continues, each one smaller than the last and the triangle gradually eases upward. Eventually the area of indecision is resolved and the formation explodes, usually with an increase in volume.

Symmetrical-triangle

 

 

 

 

 

 

 

 

Syria Pounds

The currency of Syria. Currency code ( SYP )

 

 

 

 

 

 

  Swiss National Bank

The Swiss National Bank conducts the country’s monetary policy as an independent central bank. In so doing, it creates an appropriate environment for economic growth. The National Bank is obliged by the Constitution and statute to act in accordance with the general interests of the country. Its policy goal is price stability, while taking into account the economic situation.The Swiss National Bank is the central bank in the Swiss banking system. In addition to regulating the Swiss money supply and influencing the national interest rate–functions performed by any of the world’s major central banks–the Swiss National Bank plays a larger role than most national banks in attempting to influence the exchange rates between different national currencies, and is thus a key player in the foreign exchange market.Fixed exchange rates between national currencies were standard until the United States’ move away from the gold standard in 1971, which led to the present system of variable exchange rates beginning around 1973. In response to this, the Swiss National Bank–which remained mostly gold-backed for much of its history, until a recent large-scale gold sell-off near the start of the millennium–began attempting to maintain the stability of the Swiss franc by directly buying and selling foreign currencies through “swap” transactions, in which foreign currency is purchased at the beginning of a “swap” period and sold back at the conclusion of a “swap” period for a comparable exchange rate.Because the Swiss National Bank takes such an active role in influencing foreign currency exchange rates, the actions of the Bank should be carefully watched by any currency traders and appropriate measures taken in response. Additionally, the Bank’s willingness to deal with many forms of currency makes it an ideally stable point on which to base new investments in a variety of currency asset markets.

 

 

 

 

 

 

 

 

 

 

Swiss Francs

The currency of Switzerland. One of the major currencies traded. Currency code ( CHF )

 

 

 

 

 

 

 

Swing Trading

Traders who can react quickly to market changes, including at-home and day traders, benefit from swing trading, which is a trade strategy that involves holding a position for longer than a day. If a trade seems to be going sour, swing traders can exit the market before losing too much money.Swing traders usually maintain a position for 3-10 days, taking advantage of any positive swings in the market. They flow with the market, taking little trades here and there.In fact, swing trading sits squarely in the middle between day trading and trend trading in terms of the length of time invested in a position. These traders stick around just long enough to see how the wind will blow before deciding to stay and see a trend through or go on to more profitable pastures.

 

 

 

 

 

 

 

 

 

 

 

 

  Swap

The simultaneous buying and selling of the same amount of a given currency at a forward exchange rate.

 

 

 

 

 

 

 

Swedish Kronor

The currency of Sweden. Currency code ( SEK )

 

 

 

Swap

The simultaneous buying and selling of the same amount of a given currency at a forward exchange rate.

Summary: Common Chart Indicators

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Summary: Common Chart Indicators

summary-common-chart-indicators

Everything you learn about trading is like a tool that is being added to your trader’s toolbox. Your tools will give you a better chance of making good trading decisions when you use the right tool at the right time.

Bollinger Bands.

  • Used to measure the market’s volatility.
  • They act like mini support and resistance levels.

Bollinger Bounce

  • A strategy that relies on the notion that price tends to always return to the middle of the Bollinger bands.
  • You buy when the price hits the lower Bollinger band.
  • You sell when the price hits the upper Bollinger band.
  • Best used in ranging markets.

Bollinger Squeeze

  • A strategy that is used to catch breakouts early.
  • When the Bollinger bands “squeeze”, it means that the market is very quiet, and a breakout is eminent. Once a breakout occurs, we enter a trade on whatever side the price makes its breakout.

MACD

  • Used to catch trends early and can also help us spot trend reversals.
  • It consists of 2 moving averages (1 fast, 1 slow) and vertical lines called a histogram, which measures the distance between the 2 moving averages.
  • Contrary to what many people think, the moving average lines are NOT moving averages of the price. They are moving averages of other moving averages.
  • MACD’s downfall is its lag because it uses so many moving averages.
  • One way to use MACD is to wait for the fast line to “cross over” or “cross under” the slow line and enter the trade accordingly because it signals a new trend.

Parabolic SAR

  • This indicator is made to spot trend reversals, hence the name Parabolic Stop And Reversal (SAR).
  • This is the easiest indicator to interpret because it only gives bullish and bearish signals.
  • When the dots are above the candles, it is a sell signal.
  • When the dots are below the candles, it is a buy signal.
  • These are best used in trending markets that consist of long rallies and downturns.

Stochastic

  • Used to indicate overbought and oversold conditions.
  • When the moving average lines are above 80, it means that the market is overbought and we should look to sell.
  • When the moving average lines are below 20, it means that the market is oversold and we should look to buy.

Relative Strength Index (RSI)

  • Similar to the stochastic in that it indicates overbought and oversold conditions.
  • When RSI is above 70, it means that the market is overbought and we should look to sell.
  • When RSI is below 30, it means that the market is oversold and we should look to buy.
  • RSI can also be used to confirm trend formations. If you think a trend is forming, wait for RSI to go above or below 50 (depending on if you’re looking at an uptrend or downtrend) before you enter a trade.

Average Directional Index (ADX)

  • The ADX calculates the potential strength of a trend.
  • It fluctuates from 0 to 100, with readings below 20 indicating a weak trend and readings above 50 signaling a strong trend.
  • ADX can be used as confirmation whether the pair could possibly continue in its current trend or not.
  • ADX can also be used to determine when one should close a trade early. For instance, when ADX starts to slide below 50, it indicates that the current trend is possibly losing steam.

Ichimoku Kinko Hyo

  • Ichimoku Kinko Hyo (IKH) is an indicator that gauges future price momentum and determines future areas of support and resistance.
  • Ichimoku translates to “a glance”, kinko means “equilibrium”, while hyo is Japanese for “chart”. Putting that all together, the phrase ichimoku kinko hyo stands for “a glance at a chart in equilibrium.”
  • If the price is above the Senkou span, the top line serves as the first support level while the bottom line serves as the second support level. If the price is below the Senkou span, the bottom line forms the first resistance level while the top line is the second resistance level.
  • The Kijun Sen acts as an indicator of future price movement. If the price is higher than the blue line, it could continue to climb higher. If the price is below the blue line, it could keep dropping.
  • The Tenkan Sen is an indicator of the market trend. If the red line is moving up or down, it indicates that the market is trending. If it moves horizontally, it signals that the market is ranging.
  • The Chikou Span is the lagging line. If the Chikou line crosses the price in the bottom-up direction, that’s a buy signal. If the green line crosses the price from the top-down, that’s a sell signal.

Each indicator has its imperfections. This is why traders combine many different indicators to “screen” each other. As you progress through your trading career, you will learn which indicators you like the best and can combine them in a way that fits your trading style.

source: www.babypips.com
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What is the Most Profitable Indicator?

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – What is the Most Profitable Indicator?

Now on to the good stuff: Just how profitable is each indicator on its own?

After all, traders don’t include these indicators just to make their charts look nicer. Traders are in the business of making money! If these indicators generate signals that don’t translate to a profitable bottom line over time, then they’re simply not the way to go for your needs!

In order to give y’all a comparison of the effectiveness of each indicator, we’ve decided to backtest each of the indicators on their own for the past 5 years. Backtesting, the expertise of our resident robot Robopip, involves retroactively testing the parameters of the indicators against historical price action. You’ll learn more about this in your future studies.

For now, just take a look at the parameters we used for our backtest.

Indicator Parameters Rules
Bollinger Bands (30,2,2) Cover and go long when daily closing price crosses below lower bandCover and go short when daily closing price crosses above upper band
MACD (12,26,9) Cover and go long when MACD1 (fast) crosses above MACD2 (slow)Cover and go short when MACD1 crosses below MACD2
Parabolic SAR (.02,.02,.2) Cover and go long when daily closing price crosses above ParSARCover and go short when daily closing price crosses below ParSAR
Stochastic (14,3,3) Cover and go long when Stoch %K crosses above 20Cover and go short when Stoch %K crosses below 80
RSI (9) Cover and go long when RSI crosses above 30Cover and go short when RSI crosses below 70
Ichimoku Kinko Hyo (9,26,52,1) Cover and go long when conversion line crosses above base lineCover and go short when conversion line crosses below base line

Using these parameters, we tested each of the indicators on its own on the daily time frame of EUR/USD over the past 5 years. We are trading 1 lot (that’s 100,000 units) at a time with no set stop losses or take profit points. We simply cover and switch position once a new signal appears. This means if we initially had a long position then the indicator told us to sell, we would cover, and establish a new short position. Also, we were assuming we were well capitalized (as suggested in our Leverage lesson) and started with an example balance of $100,000.

Aside from the actual profit and loss of each strategy, we included total pips gained/lost and the max drawdown.

Again, let us just remind you that we DO NOT SUGGEST trading without any stop losses. This is just for illustrative purposes only!

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Moving on, here are the results of our backtest:

Strategy Number of Trades P/L in Pips P/L in % Max Drawdown
BuyAndHold 1 -3,416.66 -3.42 25.44
Bollinger Bands 20 -19,535.97 -19.54 37.99
MACD 110 3,937.67 3.94 27.55
Parabolic SAR 128 -9,746.29 -9.75 21.96
Stochastic 74 -20,716.40 -20.72 30.64
RSI 8 -18,716.69 -18.72 34.57
Ichimoku Kinko Hyo 53 30,341.22 30.34 19.51

The data showed that over the past 5-years, the indicator that performed the best on its own was the Ichimoku Kinko Hyo indicator. It generated a total profit of $30,341, or 30.35%. Over 5 years, that gives us an average of just over 6% per year!

Surprisingly, the rest of the indicators were a lot less profitable, with the Stochastic indicator showing a return of negative 20.72%. Furthermore, all of the indicators led to substantial drawdowns of between 20% to 30%.

However, this does not mean that the Ichimoku Kinko Hyo indicator is the best or that indicators as a whole are useless.

Rather, this just goes to show that they aren’t that useful on their own.

Think of all those martial arts movies you watched growing up. Aside from The Rock and the People’s Elbow, no one relied on just one move to beat all the bad guys. Each of them used a combination of moves to get the job done.

Trading is similar. It is an art and as traders, we need to learn how to use and combine the tools at hand in order to come up with a system that works for us.

This brings us to our next lesson: putting all these indicators together!

source: www.babypips.com
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Ichimoku Kinko Hyo

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Ichimoku Kinko Hyo

Yes, you’re still in the right place. You’re still in the School of Pipsology and not in some Japanese pop fan girl site (although Huck may disagree with the rest of the FX-Men on that). No, “Ichimoku Kinko Hyo” ain’t Japanese for “May the pips be with you,” but it can help you grab those pips nonetheless.

Ichimoku Kinko Hyo (IKH) is an indicator that gauges future price momentum and determines future areas of support and resistance. Now that’s 3-in-1 for y’all! Also know that this indicator is mainly used on JPY pairs.

To add to your Japanese vocab, the word ichimoku translates to “a glance”, kinko means “equilibrium”, while hyo is Japanese for “chart.” Putting that all together, the phrase ichimoku kinko hyo stands for “a glance at a chart in equilibrium.” Huh, what does all that mean?

A chart might make things easier to explain…

ichimoku-kinko-hyo

Whoops. That didn’t help. A few more lines and this’ll resemble a seismograph.

Before you go off and call this gibberish, let’s try to find out what each of the lines is for.

Kijun Sen (blue line): Also called standard line or base line, this is calculated by averaging the highest high and the lowest low for the past 26 periods.

Tenkan Sen (red line): This is also known as the turning line and is derived by averaging the highest high and the lowest low for the past nine periods.

Chikou Span (green line): This is called the lagging line. It is today’s closing price plotted 26 periods behind.

Senkou Span (orange lines): The first Senkou line is calculated by averaging the Tenkan Sen and the Kijun Sen and plotted 26 periods ahead. The second Senkou line is determined by averaging the highest high and the lowest low for the past 52 periods and plotted 26 periods ahead.

ichimoku-kinko-hyo-indicators
Got it? Well, it’s not really necessary for you to memorize how each of the lines is computed. What’s more important is for you to know how to interpret these fancy lines.

How to Trade Using Ichimoku Kinyo Hyo

Let’s take a look at the Senkou span first.

If the price is above the Senkou span, the top line serves as the first support level while the bottom line serves as the second support level.

If the price is below the Senkou span, the bottom line forms the first resistance level while the top line is the second resistance level. Got it?

Meanwhile, the Kijun Sen acts as an indicator of future price movement. If the price is higher than the blue line, it could continue to climb higher. If the price is below the blue line, it could keep dropping.

The Tenkan Sen is an indicator of the market trend. If the red line is moving up or down, it indicates that the market is trending. If it moves horizontally, it signals that the market is ranging.

Lastly, if the Chikou Span or the green line crosses the price in the bottom-up direction, that’s a buy signal. If the green line crosses the price from the top-down, that’s a sell signal.

Here’s that line-filled chart once more, this time with the trade signals:

ichimoku-kinko-hyo-example

It sure looks complicated at first but this baby’s got support and resistance levels, crossovers, oscillators, and trend indicators all in one go! Amazing, right?

Okey dokey, we’ve already covered a smorgasbord of indicators. Let’s see how we can put all of what you just learned together…

source: www.babypips.com
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Average Directional Index

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Average Directional Index

The Average Directional Index, or ADX for short, is another example of an oscillator. It fluctuates from 0 to 100, with readings below 20 indicating a weak trend and readings above 50 signaling a strong trend.

Unlike the stochastic, ADX doesn’t determine whether the trend is bullish or bearish. Rather, it merely measures the strength of the current trend. Because of that, ADX is typically used to identify whether the market is ranging or starting a new trend.

Take a look at these neat charts we’ve pulled up:

ADX-downtrend
In this first example, ADX lingered below 20 from late September until early December. As you can see from the chart, EUR/CHF was stuck inside a range during that time. Beginning in January though, ADX started to climb above 50, signaling that a strong trend could be waiting in the wings.

And would you look at that! EUR/CHF broke below the bottom of the range and went on a strong downtrend. Ooh, that’d be around 400 pips in the bag.

Book it, baby!

Now, let’s look at this next example:

ADX-uptrend
Just like in our first example, ADX hovered below 20 for quite a while. At that time, EUR/CHF was also ranging. Soon enough, ADX rose above 50 and EUR/CHF broke above the top of its range.

Tada!

A strong uptrend took place. That’d be 300 pips, signed, sealed, and delivered!

Looks simple enough, right?

If there’s one problem with using ADX, it’s that it doesn’t exactly tell you whether it’s a buy or a sell. What it does tell you is whether it’d be okay to jump in an ongoing trend or not.

Once ADX starts dropping below 50 again, it could mean that the uptrend or downtrend is starting to weaken and that it might be a good time to lock in profits.

How to Trade Using ADX

One way to trade using ADX is to wait for breakouts first before deciding to go long or short. ADX can be used as confirmation whether the pair could possibly continue in its current trend or not.

Another way is to combine ADX with another indicator, particularly one that identifies whether the pair is headed downwards or upwards.

ADX can also be used to determine when one should close a trade early.

For instance, when ADX starts to slide below 50, it indicates that the current trend is losing steam. From then, the pair could possibly move sideways, so you might want to lock in those pips before that happens.

 

 

source: www.babypips.com
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Relative Strength Index

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Relative Strength Index

Relative Strength Index, or RSI, is similar to the stochastic in that it identifies overbought and oversold conditions in the market. It is also scaled from 0 to 100. Typically, readings below 30 indicate oversold, while readings over 70 indicate overbought.

RSI-overbought-oversold

How to Trade Using RSI

RSI can be used just like the stochastic. We can use it to pick potential tops and bottoms depending on whether the market is overbought or oversold.

Below is a 4-hour chart of EUR/USD.

rsi-oversold

EUR/USD had been dropping the week, falling about 400 pips over the course of two weeks.

On June 7, it was already trading below the 1.2000 handle. However, RSI dropped below 30, signalling that there might be no more sellers left in the market and that the move could be over. Price then reversed and headed back up over the next couple of weeks.

Determining the Trend using RSI

RSI is a very popular tool because it can also be used to confirm trend formations. If you think a trend is forming, take a quick look at the RSI and look at whether it is above or below 50.

If you are looking at a possible uptrend, then make sure the RSI is above 50. If you are looking at a possible downtrend, then make sure the RSI is below 50.

RSI-cross-downtrend

In the beginning of the chart above, we can see that a possible downtrend was forming. To avoid fake outs, we can wait for RSI to cross below 50 to confirm our trend. Sure enough, as RSI passes below 50, it is a good confirmation that a downtrend has actually formed.

 

 

source: www.babypips.com
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Stochastic

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Stochastic

The Stochastic is another indicator that helps us determine where a trend might be ending.

By definition, a Stochastic is an oscillator that measures overbought and oversold conditions in the market. The 2 lines are similar to the MACD lines in the sense that one line is faster than the other.

stochastic stochastic-overbought-start stochastic-overbought-end

How to Trade Using the Stochastic

As we said earlier, the Stochastic tells us when the market is overbought or oversold. The Stochastic is scaled from 0 to 100.

When the Stochastic lines are above 80 (the red dotted line in the chart above), then it means the market is overbought. When the Stochastic lines are below 20 (the blue dotted line), then it means that the market is oversold.

As a rule of thumb, we buy when the market is oversold, and we sell when the market is overbought.

stochastic-overbought-start

Looking at the chart above, you can see that the Stochastic has been showing overbought conditions for quite some time. Based on this information, can you guess where the price might go?

stochastic-overbought-end

If you said the price would drop, then you are absolutely correct! Because the market was overbought for such a long period of time, a reversal was bound to happen.

That is the basics of the Stochastic. Many traders use the Stochastic in different ways, but the main purpose of the indicator is to show us where the market conditions could be overbought or oversold.

Over time, you will learn to use the Stochastic to fit your own personal trading style.

Okay, let’s move on to RSI.

 

 

source: www.babypips.com
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Parabolic SAR

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Parabolic SAR

Up until now, we’ve looked at indicators that mainly focus on catching the beginning of new trends. Although it is important to be able to identify new trends, it is equally important to be able to identify where a trend ends. After all, what good is a well-timed entry without a well-timed exit?

parabolic-SAR

One indicator that can help us determine where a trend might be ending is the Parabolic SAR (Stop And Reversal). A Parabolic SAR places dots, or points, on a chart that indicate potential reversals in price movement.

From the image above, you can see that the dots shift from being below the candles during the uptrend to above the candles when the trend reverses into a downtrend.

How to Trade Using Parabolic SAR

The nice thing about the Parabolic SAR is that it is really simple to use. We mean REALLY simple.

Basically, when the dots are below the candles, it is a buy signal; and when the dots are above the candles, it is a sell signal.

how-to-use-parabolic-sar

Simple?

Yes, we thought so.

This is probably the easiest indicator to interpret because it assumes that the price is either going up or down. With that said, this tool is best used in markets that are trending, and that have long rallies and downturns.

You DON’T want to use this tool in a choppy market where the price movement is sideways.

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Using Parabolic SAR to exit trades

You can also use Parabolic SAR to help you determine whether you should close your trade or not.

Check out how the Parabolic SAR worked as an exit signal in EUR/USD’s daily chart above.

parabolic-SAR-example

When EUR/USD started sliding down in late April, it seemed like it would just keep droppin’ like it’s hot. A trader who was able to short this pair has probably wondered how low it can go.

In early June, three dots formed at the bottom of the price, suggesting that the downtrend was over and that it was time to exit those shorts.

If you stubbornly decided to hold on to that trade thinking that EUR/USD would resume its drop, you would’ve probably erased all those winnings since the pair eventually climbed back near 1.3500.

 

 

source: www.babypips.com
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