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ssiFX Advanced Strategies

130323... Note that due to recent system upgrades, this page requires extensive updating

 

Introduction

ssiFX Real-Time Systems, Inc. forecasting system advanced trading strategies are strategies which extend the ssiFX Basic Strategies with other internal and external indicators. A myriad of such strategies can be designed. This page in an introduction to several classes of advanced trading strategies. It is by no means a definitive nor an exhaustive list. Many traders will undoubtedly refine these strategies or may even develop their own unique strategy classes. In fact, traders are encouraged to explore the extensive real-time indicators generated by the ssiFX system for the many subtle forecasting signals incorporated therein.

 

Internal Percentage Indicators

Percentage forecasting indicators consists of the generic column types, namely, the p-aMode, the p-vRMode, the f-aMode, the p-Chi, and the p-Psi. Note that the System Flow column is a system information indicator as opposed to a forecast indicator. Refer to Trading with ssiFX >> ssiFX Navigation >> Main Menu Page >> Trader Menus >> Forecasts Page.

Percentage indicators measure the strength of a specific forecast. At a bare minimum, all advanced strategies should incorporate the ssiFX Core Indicators, i.e. Columns D -> S. In fact, the percentage indicators within the ssiFX Core Indicators of the GCB, and to a lesser extent the GCA, currency set panels are very powerful forecasters of imminent price movements.

 

Internal Cycle Indicators

Cycle forecasting indicators consists of the generic column types, namely, the vCycles, the vMode, the f-vMode, and the vNet. Refer to Trading with ssiFX >> ssiFX Navigation >> Main Menu Page >> Trader Menus >> Forecasts Page.

Cycle indicators measure the duration of a specific forecast. The duration of a forecast indicates the strength of the underlying trend. This is a very useful metric in terms of the confidence level that may be placed on a specific forecast.

Traders are however cautioned to temper this confidence level when the financial markets approach major scheduled economic announcements and events. These would include scheduled announcements such as the Federal Reserve monthly interest rate adjustments, interest rate adjustments by other central banks, publication of monthly national inflation rates, publication of monthly national unemployment figures, etc. Note that traders must also monitor current market focus as certain economic statistics tend to exert a greater or a lesser impact depending on the prevailing market sentiment.  

 

Traditional Technical Analysis

Traditional technical analysis are almost always driven by price and volume movements. Technical tools can be categorized into three main groups, namely, graphical patterns, trending indicators, and cyclical indicators (not the same as ssiFX Internal Cycle Indicators). It is important for traders to learn and appreciate technical analysis for the simple reason that the vast majority of traders (including institutions and professional market advisers) use technical analytical methods to forecast the markets. This results in  the rather perverse effect of a trading technique that is fundamentally flawed (see below) but will be partially correct due to its wide adoption.

The universal weakness of traditional technical analysis is the fact that it tracks reality after the fact, and is therefore fundamentally flawed as a forecasting tool. Close inspection of indicators such as the MACD, the Parabolic SAR, the RSI, the Stochastic, etc. will reveal that they are quite accurate in hindsight. These indicators will flit back and forth during the time period under calculation until finally settling down at a value after the period has expired.

Notwithstanding the backward-looking nature of traditional technical analysis, when used in conjunction with the ssiFX forecasting system the traditional market indicators can give traders a feel for the prevailing market price movements of a specific currency pair.

Graphical patterns such as support and resistance linces can be quite profitably exploited when used in conjunction with the ssiFX Currency Set panel currency pairs, the GCA, and the GCB forecasts. 

Trending indicators are less useful. However, trending indicators such as the Bollinger Bands do track significant quantitative information and can be effectively used with ssiFX forecasts.

Cyclical indicators (a.k.a oscillators), such as the RSI and the Stochastic, are best used with ssiFX forecasts to refine trade entries and exits.

Note that in all cases, traders must never trade against the ssiFX forecasted trends. Any such trades are highly risky and could lead to severe losses.

 

Specialized Trading Techniques

Sling-shot Pips

The Sling-shot technique is an opportunistic trading tactic rather than an actual trading strategy. This technique involves inspecting the GCB and/or the GCA for currency sets which are indicated in a direction opposite to the actual pip gain/loss, thus setting up a contra-indicated phenomenon.

This phenomenon tends to manifest itself when major market players (central banks, hedge funds, etc.), individually or collectively, try to move a market in a direction opposite to current market pressures. This will result in a pip movement opposite to the ssiFX forecast. Eventually the market player(s) will exhaust their resources or achieve their price objective, at which time there will be a large and fast price movement in the direction indicated by the ssiFX forecast.

Because the ssiFX forecasting system monitors the very data on which the very large market players model their forecasts on, the Sling-shot technique may also be quite effectively employed when the major players try manipulate small traders into chasing a false trend. Once again, a contra-indicated phenomenon is manifested thus presenting a Sling-shot opportunity.

This technique can also be used to predict the outcome of certain market-moving announcements and events prior to the actual occurrence itself. The ssiFX forecasting system has been designed to pick up subtle market signals employed by the better-informed major players. Better-informed major players tend to position themselves on the right side of the market prior to market-moving announcements and events thus reaping huge profits when the actual announcements and events occur.

In general, traders should always pay keen attention to occurrences of contra-indicated phenomena as they can be traded quite profitably indeed.

 

Major-Minor Set Trenders

This rather effective trading technique involves first inspecting the GCB for a currency set which has been trending for a while (vCycles are at least in the thousands) and is currently infull trend mode (i.e. Columns D -> W are directionally indicated). The GCA is then inspected for trend confirmation.

The next step is to inspect the GCB for a currency set which has been trending for a relatively shorter period (as indicated by its vCycles). The GCA is then inspected for trend confirmation.

The associated Currency Set panel is then monitored for trend confirmation by the specific currency pair.

Trade entry is determined by the Currency Set panel trend confirmation, whilst trade exit is determined by the trader's risk tolerance. One can also refine trade entry and exit with conventional ossillators, such as the Stochastic or RSI. This trading tactic can be replayed many times for a particular currency pair.

The governing principle of this trading technique is the common observation that strongly trending currencies tend to maintain their underlying trends until some major news event breaks the trend. Note that this technique is particularly effective in slow markets sessions.

 

Fast Trade

This trading technique requires that the Currency Set panels be monitored for currency pair confirmed trends. The GCA and GCB panels are then inspected for trend confirmation. Trades are initiated once a trend confirmation is observed and Omega Modes p-aMode is reading 100% on the Currency Set panel. Trade exits are triggered by any breakdown in the Currency Set panel ssiFX Core Indicators, i.e. Columns D -> S.

Traders with higher risk-tolerances may choose to initiate this technique with partial GCB and GCA confirmations.

The underlying principle of this technique is early entry and fast exits upon any observed trend breakdown. This technique works best with very narrow spreads. It can however lead to a very large number of profitable small trades over short periods of time with the occasional large profit trade.