Averages: EUR/USD, EUR/JPY, GBP/USD, GBP/JPY

Correct averages from Fix prices. Averages is the gateway to many important math formulas to trade profitably such as Regression, Z and T scores, Correlation, exchange rate crossovers, Kurtosis. Averages allow for proper placement of stops and hedges for those that use such methods. But just as easy to view price in relation to averages to determine overbought and oversold levels.

I’ve been checking on JPY correlations this weekend because USD/JPY and JPY cross pairs are deeply oversold and I wanted to know if USD/JPY was correlated to JPY cross pairs for long trades.

Very simple to enter each of the main 7 averages from the 5 day to 253 to obtain a correlation. The correlation is correct provided the proper averages are used. The math professor at vassarstats Dot net not only has the best calculators but offers great tutorials for interested.

EUR/USD

5 day =1.0650

10 = 1.0622

20 – 1.0623

50 = 1.0696

100 = 1.0689

200 = 1.0350

253 = 1.0308.

EUR/JPY

5 day = 141.25

10 = 142.74,

20 = 143.52

50 = 142.65

100 = 142.11

200 = 142.81

253 = 141.76

GBP/USD

5 day = 1.2127

10 = 1.2038

20 = 1.2029

50 = 1.2095

100 = 1.2135

200 = 1.1821

253 = 1.1859

GBP/JPY

5 day = 160.86

10 = 161.76

20 = 162.54

50 = 161.31

100 = 161.25′

200 = 163.15

253 = 163.10

Brian Twomey

USD/JPY Averages: 5 day to 253

5 day = 132.6350

10 = 134.3903

20 =135.1324

50 = 133.3938

100 = 132.9733

200 = 138.2023

253 = 137.6981

See the ,top at 137.00’s and shorts. See oversold at 131.00’s. The imperative is to use correct averages derived from Fix prices rather than chart averages because chart averages are miles off and wrong. Would anyone honestly take USD/JPY long from high 136.00’s to target 137.00’s. The trade hit target but what a gamble to roll the dice in such a way and to gamble with trader subscription money. But this is common practice today as chart averages lead traders down a losing road.

Brian Twomey