FX strategy Dec 8,2016

We did some exciting trades today!

AUDUSD:

It looks like 0.7500 will be the strong resistance level for Aussie dollar, as it tested this line for three times and not able to break the line. We entered the trade at around 0.7500 and we gained great profit now.

There are two plans for Aussie dollar:

  1. Wait for it break the upward trend line (blue), then we short at the traceback and hold it tight until at least 0.7300. I would say this plan may happen with higher possibility, as compared to second plan.
  2. If Aussie breaks 0.7500, then we long Aussie at pull back.

AUDUSD_Dec8_2016.PNG

NZDUSD:

We made some exciting trade on NZDUSD as well and it was all shown on the following chart!

nzdusd_dec8_2016_h1

 

USDJPY:

The probability for next week interest rate hike is ~99% (next week). However, we can’t just buy USDJPY now, if we don’t buy it from 100-102 area.

105.60 area is the important level for USDJPY.

There are two plans:

  1. If USDJPY breaks 105.60, then we definitely can long US dollar at pullback.
  2. If there is strong price reaction at this resistance line, then we can enter short term trade to sell US dollar until 110 area. And then maybe we can long US dollar at 110, if it didn’t break the line. If US dollar breaks 110, then it will be another story and we need to analyze again then.

USDJPY_Dec8_2016.PNG

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Predict stock performance by using MLR

It is to use multi-linear regression(MLR) to study each individual factor contributing to the stock performance within 3 months’ time.

The code will be written in python language.

For stock data, we downloaded from https://www.zacks.com/screening/stock-screener, as it allows you to export the data to .csv file.

The selection criteria uses in our project is as follows:

Time as of Nov 30/2016

  1. Market Cap >= 100 million
  2. Avg Volume >= 10000
  3. Beta <= 3
  4. P/E(Trailing 12 Months) <= 150
  5. Current Ratio < 10
  6. Current ROE(TTM) >= -100
  7. 12 Mo Trailing EPS >= 0
  8. Price as a % of 52 Wk H-L Range > -100%
  9. % Price Change (12 Weeks) > -100%

There are 2718 stocks being screened out through the criteria. And we split the data into train data and test data with about 80% to 20% ratio.

We train the multi-linear regression model with train data and generate the pred data based on test set.

Meanwhile, we are trying to find out which are the most critical factors that would contribute most to the % Price Change (12 Weeks).

The method that we used to optimize our model is backward eliminination (https://en.wikipedia.org/wiki/Stepwise_regression).

After optimized, the most critical factors are:

  • market cap (x1)
  • average volume within one day (x2)
  • current ratio (x3)
  • Price as a % of 52 Wk H-L Range (x4)

 

summary_table

From the model, we can draw the multi-linear liquation as follows:

% Price Change (12 Weeks) = (-20.6866) + (-3.612e-05)*(market cap) + (2.037e-07)*(average volume within one day) + (-0.2819)*(current ratio) + (0.3669)*(Price as a % of 52 Wk H-L Range)

Definitely, this model will not be the best one and it is just for study and research purpose.

 

You can download the full code as github:

https://github.com/edwardchenzf/MLR_Stock_Predict

FX strategy Nov 27, 2016

Note: December Non-Farm News will be release next Friday (Dec 2, 2016).

Gold:

We will still keep the short strategy on gold, unless it is able to break 1200 before next Friday. Gold finds the support around 1171, as this level is the 0.618 pull back of gold on the bigger time frame. 1191 might be good level to short gold, but we need to see the price reaction. If gold breaks 1171, then we can take short term trade to short gold till 1142 and 1132.

gold_nov27_2016

USDJPY:

USDJPY will still go up in a longer time frame before it reaches 115.62 or 116.00. Before that, there might be a pull back at 111.50-112, and we can long from there.

USDJPY_Nov27_2016.PNG

 

GBPUSD:

Pond might go with a Gartley pattern and let’s wait and check it out.

GBPUSD_Nov27_2016.PNG

FX strategy Nov 13, 2016

Gold

The previous strategy of shorting gold was very successful. Currently, we still hold the shorting opinion on gold. Gold broke the previous low point at around 1240 and the next strong support level is at 1200.

we can short gold at the pull back around 1240-1251. If there is no pull back, please don’t enter the trade. The target is 1200. If gold reached 1200 and i foresee there will be strong support here (it is the reverse 1.618 point of previous rally). There might be a rally around 1200. And we can buy gold at around this area, but it will depend on the price reaction. Let’s watch it closely.

gold_nov13_2016

AUDUSD: if AUDUSD can’t break 0.7500, then let’s wait for the pull back around 0.7600 and short around there.

USDJPY: If USDJPY didn’t break 106,then we can long USDJPY at here and the next target is ~107.50.

 

FX strategy on Nov 2 2016

AUDUSD

AUDUSD is still within up trend channel, but it can’t break new high for half an year. So the strategy is to short at high point and buy conservatively at low point.

We can aim to short at ~0.7717 or ~0.7750, and we need to watch the price reaction at here.

AUDUSD might complete three drives pattern. Then we need to short AUDUSD at ~0.7750.

audusd_nov2_2016_1

audusd_nov2_2016_2

 

USDJPY

USDJPY didn’t break the resistance line at ~105.50 and went down 200+ pips.

We will closely watch the area ~102, which is the 0.618 pull back also the support level.

If USDJPY didn’t break ~102, then we can buy USDJPY here.

usdjpy_nov2_2016

 

Gold

Gold went up due to uncertainty arising for US president election. We will watch whether Gold can break 1310.

If gold can’t break 1310, then we can short there. Otherwise, let’s watch the show.

gold_nov2_2016