Thursday, January 21, 2010

Currency Domination


This is the additional indicator to support FullHouse indicator. I called it DominanIndex indicator. It derived from FullHouse indicator, using the same method but presented in the different form. It's still little bit hard to measure the domination of the currency manually by looking at FullHouse indicator. That's why the DominanIndex indicator is going to work.

It calculate the index of strength for the single currency base on comparison between EUR, GBP, USD and JPY. Those currencies are variables in an equation. One at a time each variable must be solved and countered.

Signal :
+ve, currency is strong
-ve, currency is weak
The strongest index number is 6.

For example:
JPY strong --> base JPY pair Down (BEARISH)
JPY weak --> base JPY pair Up (BULLISH)
EUR strong --> quote EUR pair Up (BULLISH)
EUR weak --> quote EUR pair Down (BEARISH)

Download Link:
DominanIndex

Sunday, January 17, 2010

Forex & Stock Market


The Relationship Between the Stock Market and Forex Markets

The equity market can impact the currency market in many different ways. For example, if a strong stock market rally happens in the U.S., with the Dow and the Nasdaq registering impressive gains, we are likely to see a large influx of foreign money into the U.S., as international investors rush in to join the party. This influx of money would be very positive for the U.S. dollar, because in order to participate in the equity market rally, foreign investors would have to sell their own domestic currency and purchase U.S. dollars. The opposite also holds true: if the stock market in the U.S. is doing poorly, foreign investors will most likely rush to sell their U.S. equity holdings and then reconvert the U.S. dollars into their domestic currency - which would have a substantially negative impact on the greenback. This logic can be applied to all the other currencies and equity markets around the world. It is also the most basic usage of equity market flows to trade FX.
 
Disclaimer :
The content of this blog is for 'Forex Trading Journal' purpose only. Nothing on this site should be construed as recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.