One time in any given year, currency prices are sufficiently deviated enough to offer the most easiest, most profitable, most guaranteed market derived trades. The profits earned by this one period will outperform money results by trading an entire year. Why is based on the question to define markets and trading and the action of market prices.
All market prices in all financial instruments travel from deviation to non deviation then back to deviation and non deviation again. Most profitable period to earn easiest money is at the peak of the deviation to trade to non deviation. Once non deviation is achieved, trades are difficult and won’t perform to the profit potential of highest deviations because prices are on the way to deviation again. This means traders can refrain from trading for almost an entire year to wait for the peak deviation period. Think in terms of a winner lottery ticket, a broken ATM machine that ejects money.
Trades past, present and future are defined as a target number and doesn’t require a chart, graph, stop, focus on central bank meeting, economic releases, tariffs. A target price must achieve its destination and it doesn’t have any other choice.
The amount of trades in any year is defined as 7 or 21 to cover 28 currency pairs but the amount depends on what is deviated. Total trades are higher if emerging market currencies are included as a deviated market includes all markets.
Non deviation to deviation is a process and takes 1 year to achieve maximum peak levels.
For the past 3 years, the 2nd quarter and sometimes part 3rd quarter was the time of highest peak levels.
Deviation to answer what is deviated means either USD and Non USD or cross pairs. Each year USD and Non USD take deviated turns to cross pairs. 3 years ago, USD and Non USD was most deviated and this means only 7 USD and Non USD were the trades. Last year, cross pairs were most deviated to USD and Non USD and this means 21 trades became available. This year, USD V Non USD are most deviated. Next year, cross pairs will become the most opportune trades for 21 total trades.
Trade duration to targets usually means as much as 1 quarter, 3 months or 12 weeks. Depends on the currency pair, deviation and time to achieve target.
I’m waiting for the time when USD and Non USD and cross pairs deviate at the same time to maximum peak and this current quarter is under this very question but only as it applies to GBP yet my suspicion is markets would never allow a greater distance than exists today and the past 3 year example.
A non deviated market refers to roughly 150 to 250 pips. This deviation is built into the price system naturally. By speculation, its impossible to achieve less. A non deviated market for the past 3 years travels to maximum peak deviation at roughly 600 pips. From 150 and 250 to 600 defines a fairly normal functioning yearly market. Higher than 600 refers to abnormality. Current year trades at abnormality. Abnormality can only mean the expected correction never arrived as anticipated and prices continued on their wayward path.
When cross pairs are deviated, USD and Non USD trade in tiny ranges while the opposite holds true. When USD and Non is deviated, cross pairs trade in tiny ranges. Markets allow deviations to achieve non deviation status.
The foundation to such price concepts must derive from the current 12 1/2 year economic period and 4th period but also the last quadrant in an overall 50 year time frame. In comparison, currency cycle trends are 9 years, a 3 1/2 year price lag to the economic cycle. The 9 years means mini cycles of 4 at 2.25 years while economic cycles are 4 periods of 3 years. Market prices are laggards to the economic cycles.
GBP pairs are most abnormal followed by AUD, NZD and EUR while USD is fine. AUD, NZD and EUR fall within regular bounds of overall normal functioning markets.
Below are currency pair price targets, normalization point and deviations then deviations to long term targets.
GBP/USD. 1.3600’s target, Normalization 1.2900’s = 900 pip deviation and 1600 pip deviation to target.
GBP/JPY. 147.00’s target, Normalization 136.00’s = 1000 pip deviation and 2100 pip deviation to target.
GBP/CHF. 1.3200’s target , Normalization 1.2400’s = 800 pip deviation and 1500 pip deviation to target.
GBP/CAD Normalization 1.6500’s and 700 pip deviation.
GBP/NZD Normalization 1.8800’s and 300 pip deviation.
GBP/AUD Normalization 1.7900’s and 200 pip deviation.
AUD/USD 0.7400’s target, normalization 0.6900’s = 200 pip deviation and 700 pip deviation to target.
AUD/CHF 0.7375 target, Normalization 0.6800’s = 300 pip deviation and 800 pip deviation to target.
AUD/JPY 80.00 target, Normalization 74.00’s = 300 pip deviation and 900 pip deviation to target.
NZD/USD. 0.6800’s target, Normalization 0.6600’s = 200 pip deviation and 400 pip deviation to target.
NZD/CHF 0.6800 target, Normalization 0.6500’s = 300 pip deviation and 600 pip deviation to target.
NZD/JPY 72.00 target, Normalization 71.00’s = 300 pip deviation and 400 pip deviation to target.
EUR/USD 1.1547 target, Normalization 1.1216 = 300 pip deviation to target.
EUR/JPY 124.00’s target Normalization 121.00’s = 300 pip deviation and 600 pip deviation to target.
EUR/AUD. 1.5700’s target Normalization 1.6200’s = 200 pip deviation and 700 pip deviation to target.
EUR/NZD No deviation
EUR/CAD No deviation.
USD/CHF No deviation
USD/JPY no deviation
CHF/JPY no deviation.
USD/CAD. 1.2800’s target, Normalization 1.3200’s = no deviation and 400 pip deviation to target.
CAD/JPY 84.00’s, Normalization 81.00 = 200 pip deviation and 500 pip deviation to target.