Tuesday, February 12, 2013

T6 FX model prospects..2.12.13

Today's Lab looks at the FX (foreign currency) possibilities using the Schwab no commission ETFs. You can always trade Forex if you want to play the currency markets and since these are 24 hour markets it requires a different way to thinking and a different time frame.  Many FX traders make the majority of their trades at 5 in the morning or 1 in the morning (West Coast times).  The interfaces between the European, Asian and US sessions can provide some real volatility and trading opportunities but we're not going into FX stategies right now.
After multiple runs of the T6 Lab and the FX ETFs the best I can say is that the prospects are dim.  Running both a top 1 and top 6 setup fails to produce anything encouraging...it's more a case of losing money quickly or slowly.  FXE (the Euro) is one of the few ETFs that may have some upside legs, but the conclusion of the study is that FXE might better be played as a component in a wider focus T2 model as opposed to part of a narrow sector like the FX markets.
Sometimes its just as important to know what not to trade as what to trade and this little study supports that idea.