FXCM Trading Championships

Watch the FXCM trading championships at myfxbook.com. Sign up for yourself and get a free demo account and a chance to win $3,000.

Canadian & New Zealand Dollars Outperform US and Austrailian Counterparts

The cointegrated spread between the CAD.USD and the AUD.NZD has widened today and is nearing a potential entry point. The spread is now 1.7 standard deviations from its mean. In order to bet on the spread to decline, one would need to execute the following two trades: Sell the CAD.USD and Buy the AUD.NZD. The amount of AUD.NZD purchased should equal 72% of the amount of CAD.USD sold. Currently, the trade is expected to make 3.1% if the spread regressed back to its average.

Cointegrated Forex Baskets

I track forex cointegration statistics on a weekly and daily basis. Here is a listing of the highest cointegrated pairs and their current normal distribution Z-score. As of Sunday night there were not any trades that exceeded two standard deviations so I am off on the sidelines. I'm watching the CHFUSD/GBPCHF and the CADUSD/AUDNZD combos closely as trading during the week progresses. More on these cointegration statistics later.

KST Indicator for ThinkOrSwim

The Know Sure Thing (KST) indicator made famous by Martin Pring is now here free and ready to be used with ThinkOrSwim software.  Feel free to copy the code below and use it however you see fit.















# Martin Pring's KNOW SURE THING (KST) Indicator
# Daily KST Simple Moving Average
# Writen by Mike Wilgus
# fxmike.blogspot.com
# ------------------------------------------------
declare lower;

#--Input variables
input rocLength1 = 10;
input rocLength2 = 15;
input rocLength3 = 20;
input rocLength4 = 30;

def sumRocLength = rocLength1+rocLength2+rocLength3+rocLength4;
def avgLength1 = 10;
def avgLength2 = 10;
def avgLength3 = 10;
def avgLength4 = 15;


#--Calc ROC - RateOfChange(length, color norm length, price)
def ROC1 = RateOfChange(rocLength1, rocLength1, close);
def ROC2 = RateOfChange(rocLength2, rocLength2, close);
def ROC3 = RateOfChange(rocLength3, rocLength3, close);
def ROC4 = RateOfChange(rocLength4, rocLength4, close);

#--Plot lines
plot zeroLine = 0;

plot fastKST = (Average(ROC1,avgLength1)*(rocLength1/sumRocLength))+
               (Average(ROC2,avgLength2)*(rocLength2/sumRocLength))+
               (Average(ROC3,avgLength3)*(rocLength3/sumRocLength))+
               (Average(ROC4,avgLength4)*(rocLength4/sumRocLength));

plot slowKST = Average(fastKST,rocLength1);


#--Set Colors and Style
zeroLine.SetDefaultColor(GetColor(7));
fastKST.SetDefaultColor(GetColor(5));
fastKST.SetStyle(Curve.LONG_DASH);
slowKST.SetDefaultColor(GetColor(1));


#--End Code--------------------------------------