Tag: Indicator

  • Ultrathin organic solar cell is efficient and durable

    Ultrathin organic solar cell is efficient and durable

    Scientists from the RIKEN, in collaboration with international partners, have succeeded in creating an ultrathin organic solar cell that is both highly efficient and durable. Using a simple post-annealing process, they created a flexible organic cell that degrades by less than 5 percent over 3,000 hours in atmospheric conditions and that simultaneously has an energy conversion ratio—a key indicator of solar cell performance—of 13 percent.

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  • What Is the DXY Dollar Index?

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    The DXY is an indicator that many market watchers and commentators reference and quote. So what is the DXY or US Dollar index?

    The DXY is a geometrically weighted index of some of the major trading partners of the United States. The composition if the DXY Index is heavily weighted towards the Euro and European countries that have not joined the European common market. The components of the DXY Index are (by weighting): Euro (57.6%), Japanese Yen (13.6%), Great Britain- Pounds Sterling (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%), and Swiss Franc (3.6%). Because of the composition of the DXY, it is sometimes referred to as the Anti-Euro Index.

    The DXY is a convenient index to use as a simple method for referencing strength and weakness of the US Dollar (USD). But its ubiquity disguises the fact that it does not reflect the value of the dollar against a broad enough basket of currencies. The DXY was created by JP Morgan in 1973, and it has only been updated once, for the introduction of the Euro currency.

    The DXY is heavily weighted towards European currencies, it underweight’s the Canadian Dollar, as a proportion of US trade, and it largely ignores important Asian and Pacific trading partners, including Korea, Australia, Taiwan and necessarily China. Even if one were interested in including the Chinese Renminbi (Yuan) it would be both difficult and of questionable informational value to include the Renminbi because China keeps their currency pegged to a range that is based on the dollar.

    A more accurate basket of currencies to track the relative value of the USD would be to value the dollar against the top US trading partners. The top 6 US trading partners, from high to low are: Canada, China, Mexico, Japan, Germany and the UK. It’s hard to say why JP Morgan created this index and how it came into such prominence. One odd thing about this index is you cannot trade it. There is no market that you can go to and buy the DXY. The closest you can get are futures and options contracts traded on the InterContinental Exchange (ICE).

    If it’s so inaccurate, then why is it so widely quoted? While there are more accurate ways to benchmark the USD, absolute precision is not always important for an indicator. Many traders and institutions likely have their own indices that they use to track the USD, but for the sake of comparison, it is very convenient to have a common index. The DXY is also highly correlated to a trade-weighted index most of the time. Relative strength or weakness moves by the USD represents huge flows of money. As I’ve written previously, the recent +10% move by the DXY represents more than $1 trillion of nominal wealth destruction. Moves of this magnitude do not happen in a vacuum and the relative weakness of the DXY is mirrored by corresponding weakness in the trade-weighted index.

    While there are shortcomings, the DXY does serve as a reliable indicator of USD strength and weakness and can be used as such, as long as one keeps in mind that it will occasionally be skewed if there are large currency moves that occur in the Euro.

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    Source by Christian Koch

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  • The Best FOREX Price Action Trading Indicator – Shift Theory Ratio Price Action Analysis

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    There is a new category of technical analysis available for trading the FOREX markets. It is called Shift Theory and this new technique is based on Shift Ratios that break down the three main types of chart conditions:

    • Choppy Markets
    • Up Trending Markets
    • Down Trending Markets

    What Shift Theory Ratios do is focus on the important data and ignores the data that is responsible for false signals and noise. The Shift Theory trading approach works better than any other form of technical analysis because it focuses on the science of price analysis. Most technical analysis today focuses on the closing price as the main piece of data that is analyzed. The main issue with that is the closing price is a moving target. A lot traders don’t realize that indicators are nothing more than measuring tools and they need to be treated that way. When it comes to measuring price you need stable data to get an accurate reading. I like to use an example of trying the weigh yourself on a scale. If you keep jumping around while you try to weigh yourself then it is almost imposable to get an accurate reading. That is exactly what the closing price does. It changes every time there is an uptick or down tick and that changes the reading of most indicators and that results in a lot of noise and false trading signals.

    The Shift Trading Ratios rely on the undeniable facts of market trends. Some examples are:

    • Prices on a chart can only go higher if they make a new high.
    • Prices on a chart can only go lower if they make a new low.
    • Choppy markets have bars that have a high percentage of overlap.

    As a trader the Shift Theory Ratios are excellent tool to keep traders disciplined and sticking to sound trading principles. As a example we will cover the reading and indications Shift Ratios give in 3 types of market conditions:

    • Choppy
    • Up Trending
    • Down trending

    When market conditions are choppy the Inside Shift Ratio is the plot that measures that type of market condition. What the Inside Shift Ratio does is measure the current bar percentage that is overlapping the previous bar. All choppy markets have a high percentage of bars that overlap each other. It is easy to see on a chart but most indicators simply cannot measure these types of condition because they are based on the closing price.

    If the market is up trending then the Upper Shift Ratio is the indicator that measures that type of price change. In up trending markets the bars on a chart should be making higher highs and that is a undeniable fact about upward moving markets.

    During down markets the Lower Shift Ratio is the indicator that measures the strength of the down trend. This again is based on the undeniable fact that downward markets must make lower lows in order to go lower.

    In the end these techniques work and the proof is in the back testing. A dirty secret many indicators have is they really don’t work and that is why nobody is willing to show any back testing results. So if you want to find the best FOREX trading indicator then you need to take a look at the Shift Theory Ratios. If you want consistent and proven results then as a traders you must focus on the important data and ignore the data that is responsible for signal noise and lag.

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    Source by David Zielinski

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