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Thanks for the reply, Kurt.
The yen looks to be breaking down here!! First was DEM now CHF next is
JPY.
MAIN QUESTIONS AT BOTTOM BUT HERE IS THE INTRO.
At work here we are working on a 'hot money' model to flag the best
currency oportunities with a three month time horizon. The company I
work for has a solid grounding in fundamental analysis so the model must
start by filtering out the 3-5 key fundamnetal relationships for each
currency. This process gives us a valuation benchmark.
The next step is to look at relative business cycle trends to get a feel
for the direction of interest rates and realtive liquidity conditions.
Tight liquidity implies a strong currency.
The final step would involve a more technical component to give us the
trend in the currency and highlight possible exit and entry points.
Based on this value, liquidity and trend framework we hope to have a
model that will flag the top five currency opportunities.
Since I am new to modelling anything technical and even fundamental I
would appreciate any comments you have regarding this outline. Have you
ever tried to marry fundamental and technical analysis? What roadblocks
have you encountered in developing your rigid technical signals? Do you
use a black box approach and simply run the series through to generate a
buy/sell signal?
Your comments would be appreciated.
Thanks Tom.
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