New Fx Technical Indicator

• admin
• September 20th, 2009

For the past 3 years I have been developing an algorithm which today looks promising as an indicator of upward movements in major currency pairs.  The indicator is called the Bell & Circus Momentum Indicator (BCMI).  Over the next sereral months I will be tracking the results of Forex Buy signals right here on the StocktwitsFX Blog.

Most readers would like to know the methodology behind BCMI buy signals.  Forex indicators as a whole tend to be “lagging” in nature.  They paint a picture of what has occurred in the past.  The challenge for the prudent currency trader in using lagging indicators is managing loss rates as risk tends to be higher.  With BCMI I sought to create a truly predictive indicator.  It is designed to anticipate upward movements in price over various timeframes.  Below is a chart of a recent buy signal received on the $EURUSD on Aug 17, 2009 at the 1.4083 level.

We have also seen some initial success with the $GBPUSD.  A buy signal was triggered  three weeks ago at the 1.6160 level.  This week we will be watching the $EURUSD.  Major economic events this week should have a significant effect on our pricing models.   Coming up…

• Fed Open Market Committee starts its 2-Day meeting Monday evening.
• G20 Summit starts in earnest on Wednesday
• Tim Geithner testifies before the House Financial Services Committe on Wednesday just as the FOMC announces its decision on interest rates.

It will be interesting to see how this unique combination of events affects our pricing model for the $EURUSD and $GBPUSD over the next several days.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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