Mirror Trader is a trading platform that allows you to follow the strategies and signals of other traders. It's an ideal solution for traders who follow the FX markets, but who don't always have the time to determine what and when to trade. With Mirror Trader you can evaluate and build a portfolio of back-tested strategies, or you can follow individual signals that support your own trading analysis. In this thread, we can discuss the many approaches to using the platform.
Leadership in the US Senate announced early Wednesday afternoon a deal that would raise the US debt limit and reopen the US Federal Government â closed since October 1. Avoiding default on the US government's debt seems like a plus for the US dollar, but the currency's safe haven status could still lead to a sell off in favor of higher yielding currencies which tend to rise due to the carry trade as risk appetite increases. One way to reduce the complications of the conflicting fundamental implications is to trade a basket of carry trade exposure. Using the long Dollar-based Carry Trade Basket on the Mirror Trader Platform, we can diversify individual pair risk and look to employ a trade on the benchmark as well. If you have an FXCM account, then your Trading Station username and password can also be used to log into Mirror Trader for access to currency baskets.
The US Dollar has broken substantial lows versus the Euro and is near major price support versus the Japanese Yen and other major currencies. USD/JPY 5-Minute Chart DailyFX quantitative strategist David Rodriguez believes the greenback will break lower: "Our Retail FX sentiment-based strategies have sold into USD weakness as crowds buy into the breakdown, and indeed broad outlook leaves us in favor of continued weakness. Weekly Summary of Forex Trader Sentiment and Changes in Positioning "Given the breakdown and a sharp shift in crowd sentiment, we see little choice but to remain in favor of continued USD weakness." The sentiment-based Breakout2 strategy on DailyFX PLUS is currency giving a signal to short USD/JPY at current levels. Breakout2 and other DailyFX PLUS Trading Signals are available as automated strategies on Mirror Trader.
Extremely one-sided crowd sentiment, strong rallies in the US S&P 500 and other global equities, and very low FX market volatility all favor weakness in the safe-haven US currency. Forex Volatility Prices Continue to Tumble, Favoring Slow-Moving Markets Source: OTC FX Options Prices from Bloomberg; DailyFX Calculations Quantitative Strategist David Rodriguez's preference is to use the sentiment-based trading strategies available on DailyFX PLUS to trade the US Dollar lower until further notice. DailyFX Individual Currency Pair Conditions and Trading Strategy Bias For example, the Momentum 2 strategy is currently giving a signal to buy EUR/USD with a trailing stop at 1.3532. DailyFX PLUS Trading Signals are available as automated strategies on the Mirror Trader platform.
Yesterday, Quantitative Strategist David Rodriguez said that his "preference is to use the sentiment-based trading strategies available on DailyFX PLUS to trade the US Dollar lower until further notice." Today's release of the Non Farm Payrolls data for September has turned out to be a catalyst for driving the US dollar lower and sending EUR/USD to its highest levels since 2011. Past performance is not necessarily indicative of future results. The pair is up over 100 pips since the announcement as are the DailyFX PLUS Momentum2 trading signals from yesterday saying to go long the Euro, the British Pound and the Australian dollar versus the US Dollar. Past performance is not necessarily indicative of future results. Note that the window to enter these trades has already passed as indicated by the "Hold" status in the Action column above. DailyFX PLUS trading signals are available as automated strategies on the Mirror Trader platform.
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According the weekly update of the Speculative Sentiment Index (SSI) just released on DailyFX.com, the US Dollar looks to be at major risk of further declines versus the Japanese Yen. That's because not only are retail traders still net long USD/JPY, their net long positioning has actually grown more extreme since last week. Since SSI is a contrarian indicator, that's a strong bullish signal for JPY. On the other hand, traders have reduced their short positioning in AUD/USD significantly. That could indicate that the US Dollar might have set an important bottom versus the Australian Dollar. Weekly Summary of Forex Trader Sentiment and Changes in Positioning It's no surprise then that the sentiment-based trading strategies on DailyFX PLUS are currently giving signals to short AUD/JPY. In particular, the Momentum2 strategy is giving a signal to short the pair at current levels with a trailing stop at 94.8307. DailyFX PLUS trading signals are available as automated strategies on the Mirror Trader platform.
The AUD/USD pair found strong resistance at the 200-Day Simple Moving Average. Jeremy Wagner, Head Forex Trading Instructor at DailyFX, had this to say regarding the Aussie: "Now that equities are near the top of their ranges, there is an increased probability of a dip to modestly lower levels. If the stock markets shift sideways to lower in the range, we can reasonably expect the Aussie to move lower. Therefore, the trading opportunity is to sell the Australian Dollar currency basket." In addition to the AUD currency basket, the Mirror Trader platform offers a variety of other Currency Baskets, including USD, EUR, GBP and JPY, as well as baskets designed to take advantage of interest rate differentials.
EUR/USD jumped about 40 pips on ECB Vice President Ewald Nowotny's comment that there is no realistic prospect of a rate cut for the Euro. DailyFX Quantitative Strategist David Rodriguez tweeted the following chart showing the strong correlation between EUR/USD and the net interest rate outlook of the ECB versus the Fed. This highlights the importance of the upcoming FOMC meeting. A Dollar-positive reaction seems unlikely as FOMC officials will almost definitely keep current QE purchases unchanged; disappointing September Nonfarm payrolls data and the negative economic effects of the US government shutdown will keep the Fed's bias towards easing through the foreseeable future. Both the Breakout2 and Momentum2 strategies on DailyFX PLUS are currently giving signals to buy EUR/USD. DailyFX PLUS Trading Signals can be automated on your FXCM account with the Mirror Trader platform. You can use your Trading Station username and password to log into Mirror Trader.
For the past few weeks, DailyFX Quantitative Strategist David Rodriguez has written about how the US Dollar was likely to fall to fresh lows against the Euro as the Speculative Sentiment Index (SSI) indicated that crowds were their most short EUR/USD on record. Over this time, EUR/USD has reached its highest levels since 2011. However, today Rodriguez called attention to the fact that the sentiment-based Momentum2 strategy on DailyFX PLUS has now gone in the opposite direction. This could represent an important turning point for the US currency. Momentum2 is a trend trading strategy that aims to catch shifts in trend using trader sentiment as an indicator. The strategy looks to buy when SSI reaches its lowest value for the past 145 trading hours, and looks to short when it reaches its highest value for the past 145 trading hours. The strategy is giving a signal to short GBP/USD because SSI hit its most extreme positive level for the past 145 trading hours, which suggests that the GBP/USD could be trending downwards. The trailing stop loss has been set at 1.61467. Momentum2 is available as an automated strategy on the Mirror Trader platform. FXCM account holders can use their Trading Station username and password to log into Mirror Trader.