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2007 - 2008

Euro FX future traded at CME is one of the most traded future in the world and surely the most traded currency future available. It is based on the Euro/Dollar exchange rate and it is used by the investment community as a way to manage the risk associated with rate fluctuation and/or as a way to speculate on changes in currency rates.

Our trading system is based on Globex Euro FX future traded on the nearest month. The signals can be applied to mini Euro FX future also. Again we have chosen an instrument liquid and technical enough that can perform with our model.

This is an overnight trading system.

Trading day starts at 17:00 Chicago time until 16:00 (next day) from Monday to Thurday. Sunday and holiday the opening is 2 hours earlier. Our signals are tradable during this time at earliest convenience of the client or its broker. Signals are usually sent before 8:00 GMT and are valid until 22:00 GMT.  

Currency = USD $
Contract size = 125,000 EUR
Minimum price fluctuation (tick) = 0,0001
Tick value = 12.5 USD

For more technical info click on www.cme.com     

The trading system we have developed is based on a trend following approach. We strictly follow this rule so we tend to reduce the number of trades during the year, to provide good entries on significant levels where we believe (statistically) that the market will bump or will break. We strongly believe in overnight and trend following trading.


Maximum Stop loss = 1,500 USD
Initial Capital required = 15,000 USD

The USD fell to an all-time low today and the Euro FX future march delivery broke the 1.51 price level. The macroeconomic scenario is complicated and major currency analysts predict that the rate can rise up to 1.55 by the end of march. We have to focus on rate decisions of both Fed and ECB to understand the price upside movement.

 

The US central bank will likely reduce again its overnight lending rate to fight a slumping economy. On the other hand it seems that ECB has no intention to cut Euro lending rate because of inflation concerns fueled by dangerous data release on German import prices. Considering the interest rate parity theory (IRP), an increase in the spread between US and Europe interest rates will carry to a backwardation condition in Euro FX future. We are already in this condition, because March future is higher than the June's one. We do not expect Euro FX future to be at 1.55 by the end of march for this reason, however we expect it to trade above 1.50.

January has been characterized by deep downside movements that affected stock indexes worldwide. High instability generated by concerns about recession has increased volatility considerably. In order for our clients to avoid facing excessive risk, we decided to recommend a more conservative trading strategy through shorter stop ranges and fewer overnights. This strategy implemented on index futures, particularly on FTSE, has reported good profits with lower risk exposure.

The Crude Oil future hit its record high at $100,09 and afterwards it started a constant decrease in price. Such a clear movement was perfectly caught by our Trading System, generating a very good profit.

On the other hand, the Euro FX Future moved within a restricted range. It was only pushed out of it by the extraordinary decision taken by the Fed on January 22nd.

For further information on January's performance click here.