Market internal measurements (market internals), are measurements ABOUT a trading instrument, not measurements of the price of that instrument. For example, let's say the price of the S&P 500 rose from 900 to 990 over some number of days. At a very basic level, the S&P rose 90 points. You could also say it rose 10%. These are NOT market internals. However, if we looked under the hood of the components of the S&P 500 and see how they behaved during this 90 point price rise, those would be market internals. For example:
Advance Decline Ratio -- This is equal to # of Advancing Issues / # of Declining Issues. Let's say that out of the 500 stocks that made up the S&P index, only 100 of them rose in price while the index rose the 90 points. This would mean the Advance Decline Ratio = (100/400) = .25. But if instead the number of stocks that rose was 400, then that would mean the A/D ratio = (400/100) = 4. The difference between a .25 A/D and a 4 A/D during a 90 point rise in the S&P is quite significant.
Trin -- The Trin measures a double ratio of advancing to declining stocks compared to buying volume to selling volume. The equation for Trin looks like this:
(Advancing Issues / Declining Issues) / (Advancing Volume / Declining Volume)With this measurement, you can see how much conviction the advancing stocks have compared to the declining stocks since their volume is included in the calculation.
These are but 2 of the many 'market internals' for the stock and equity markets. Even MoneyCentral
has Market Internals listed on their summary page of daily market performance.
There are two basic reasons that there two basic reasons that there aren't readily available for the forex market:
- Volume Measurments -- Volume measurements are nearly impossible to get for the forex market. Unlike the stock markets, where there is a single market through which stocks are bought and sold, the forex market is really a market of markets. There are dozens of banks and brokers that provide traders the ability to trade. So any volume measurements one might get is realy only the volume for that particular bank or broker. Thus it is very difficult to accurately determine the total market volume for any currency pair at anytime or over any timeframe.
- Limited Instrument Data -- By this we mean that there are really a very limited number of currency pairs compared to the stock market. The S&P 500 has 500 stocks to measure for individual performance. According to the Bank of International Settlements, 80-90% of all trading in the forex market occurs among 8 currencies and really no more than 40 pairs account for nearly all of the forex market. However, brokers tend to focus even among these 50 pairs on only a handful. Finding a broker who provides data on the AUDCAD or the CADCHF or the NZDCAD is very hard and thus getting good data on all of the various pairs to create a market internal measurement is very difficult.
A: Well, FX Internals has been able to solve one of the problems described above. We have developed a system to mathematically calculate the price strength of any currency pair by using two related currency pairs. You can calculate the strength of the EUR vs. the CHF by looking at the strength of the EURUSD compared to the USDCHF. This interprolation gives us the ability to solve problem #2 described in the previous question. We also have developed some custom strength of change measurements for each currency that allow us to finely understand the strength of each currency of a currency pair.
The main way the indicators should be used, in our opinion, is as filters to confirm your existing trading descisions. For a full discussion on how the indicators work and examples of how they may be used, please go the the Indicators
A: The short answer is yes. We don't know when the will be done, or how they will work just yet, but trading systems are the next step in our efforts.
A: Well, first, thanks for the compliment! There are two things you can do to help us. Please donate a little bit of your time to support our development efforts. Knowing that people are finding some bugs, giving us development suggestions, or even knowing that people like what we are doing helps spur us on. Also, please sign up for a demo and test out the software. And please send us your comments and feedback.
A: Three potential problems that we run into:
You must allow Microsoft .NET 3.51 to be installed on your machine. You can find it here
You need to install our software into the directory that your MetaTrader4 software is installed in. The path you select for installation should look something like this: C:\Program Files\FXCM MT4 powered by BT\
The Set Password Utility will come up during install for you enter your username and password. You may need to activate it from the Task Bar. Or, if you want to run the Set Password Utility after installation, please select Start:Programs:FXInternals:SetPassword.
You can retrieve your password by clicking here
. If you are unable to locate your password via the retrieval page then you can email us at firstname.lastname@example.org
from the email on file and we will reset your password.
Microsoft changed the security process they use from Windows XP to Vista. They introduced User Account Control (UAC) which cause Vista to ask you all the time to confirm running a program or changing a setting. Unfortunately, this causes communication problems between Metatrader4 and TraderHelper. To fix this problem you need to turn off UAC in Vista:
1) Open your Control Panel which can be found in the Start menu.
2) In the Control Panel, find the 'User Accounts' icon and double click it to open it up.
3) In the User Accounts window, there is a link called "Turn User Account Control on or off". Click on it.
4) You will then see a check box called "Use User Account Control (UAC) to help protect your computer", make sure it is NOT CHECKED, and hit 'OK'.
That should do it. After you have turned off UAC, run your MT4, and launch Trader Helper.