Unequivocal Signals
Those familiar with my work may know my predilection for classical yet less kown indicators and techniques.
The below chart is an example of a breadth indicator normally used for stocks: the Bullish Percentage Index. At FXstreet.com we build the same indicator for the Forex market based on a proprietary formula. The below EUR-BPI measures the percentage of euro-based pairs which are printing a bullish signal on Point and Figure charts. A rising line means that more euro-based pairs are bullish, and conversely, a falling line means that less euro-based pairs are bullish.
The above image is a construction with Teletrader a daily EUR/USD chart and the FXStreet.com's Bullish Percentage Index, which can be found at FXstudies under breadth indicators.
If you have any questions or comments about its use, just drop a message below.
Happy trading!
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Comment by Gonçalo Moreira on September 25, 2012 at 10:20am -
If you are already using the FXstudies, this link will take you directly to the BPI widget. You may want to adjust it to your pair of preference, zoom in and out, go back in history, and even share it with other users.
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Comment by Peter jcp on September 25, 2012 at 10:31am -
Hi Goncalo - I love bespoke indicators and therefore take great interest in what you have tried. Will check through your studies and read up more on what you have done etc - and thank you for sharing with the forum - regards Peter
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Comment by Gonçalo Moreira on September 25, 2012 at 11:39am
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Thanks Peter,
The Bullish Percentage Index is calculated on a daily closing basis and therefore to be seen as a tool in combination with others.
The message it provides is if a certain trend is generalized across all currency pairs. The above pictured BPI, for instance, is the EUR BPI plotted with a EUR/USD chart. That is, the BPI is not measuring what the EUR is doing against the USD, but rather against many other currencies. That is why some of the signals may appear before price action in a certain pair develops into a significant price change.
Regards
gon
Comment
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