New book by Larry Connors Click here Improve your trading - See how
Trading successfully requires a simple yet effective system to enter and exit trades. I'd like to show you our proprietary forex ranking method called FXrpm. This is a simple-to-use indicator that looks at the seven most popular cross-currencies and identifies the strongest and weakest pairs.
FXrpm is based upon a proprietary algorithm created by Cesar Alvarez, Director of Research for Connors Research. This specialized method is able to identify which currency pairs are seeing large inflows of money and which pairs are seeing large outflows. A rating is then given to each pair between 1-7, with 1 being the strongest and 7 being the weakest.
First we need to check the FXrpm page. As you can see, the strongest two pairs are in green and the weakest two pairs are in red. The three pairs in the middle are neutral. You should be looking for long entries (buy setups) in the two strongest pairs (green). Conversely you should be looking for short entries (sell setups) in the two weakest pairs (red).
For those of you who day trade the forex markets, we offer real-time FXrpm
. FXrpm subscribers receive real-time updates, including a breakdown of the previous 48-hours in 5-minute increments so they can track exactly when the ratings changed due to increased/decreased money flow. Here is a screen shot of the real-time version.
Let's take a look at some actual trading examples:
On 1/17/06 USD/JPY had an FXrpm reading
of 1 at 3:15 AM (small green arrow). As you can see, this led to a very large rally.
On 1/20/06 USD/CAD had an FXrpm reading
of 7 at 5:45 AM (small red arrow). In this example, USD/CAD declined sharply for the next 2-hours.
Obviously every trade won't work out this well. However, as these two examples show, FXrpm
can help improve your trading. They should not be used exclusively as buy/sell signals, but in conjunction with chart patterns, economic/fundamental news, etc.Click here for more information on FXrpm. To help you get started we have strategies you could employ in addition to running free training classes every day that are designed to help you understand FXrpm and how to use them more effectively.
Darren Wong
Associate Editor
darrenw@tradingmarkets.com
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The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
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HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
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