This was indeed an interesting week in the Forex and Crypto currency space with a lot of volatility in the market ahead of some important economic numbers this week.
To start off, some helpful insight from an engineer on the steps involved in coding your own EA. Nothing can be quite as interesting as learning the ins and outs of developing your own algorithm!
Forex Algorithmic Trading
MT4 has been around for a relatively long time and is considered the gold standard when it comes to the development of trading systems for retail traders.
Not only is the code base relatively easy to understand but the prevalence of the offering among a whole host of forex brokers is well known.
In an interesting piece by Rogelio Mengual from Toptal, he gives an overview of how engineers can use their mechanical and coding skills to develop effective trading algorithms.
Rogelio was given a task by a client to develop a trading EA that the client hoped would be profitable based on a number of different metrics.
However, on some solid back testing he discovered that this was indeed not the most profitable strategy to follow so he decided to complete a number of little tweaks.
It is an interesting piece and could no doubt help those readers who have some understanding of coding with Metaquotes.
Bitcoin ETFs are now Very Likely
Bitcoin ETFs are now more likely than they have ever been in the past. Citing a Bloomberg Technology video, Lester Coleman takes us through the rationale as to why an ETF is so likely.
Not only is the SEC also warming to the idea after having rejected it again, but the CBOE has made the statement that they intend to list Bitcoin futures in due course.
This also comes off the heels of the moves by the CFTC in July in which they granted LedgerX the ability to provide clearing services under the Commodity Exchange Act.
Crypto Options are the New Vouge
Money is flowing out of traditional funds such as stocks and bonds and is moving into CryptoCurrency. This has been confirmed by CNBC who has seen the largest withdrawal rate from the markets for a number of years.
Also taking a hit is the traditional store of value investments such as precious metals. Although this may be part of a larger trend, there is also general market risk off sentiment that is abound.
While investors are chasing “physical” bitcoins, a company called LAToken is trying to make it easier for individuals to participate in “tokenized” investments. These allow traders to benefit from market movements similar to how stock options help investors profit.
Lots of Volatility Ahead for GBPUSD
The USD faced quite a fall after the Fed speech by Janet Yellen in Jackson Hole. This was when the markets made the conclusion that an interest rate hike may still come towards the end of the year.
However, there is indeed a big data week this one coming for the pair. There is continued uncertainty about the path of Brexit and how it will impact the UK economy.
On the other side, there appears to still be a glimmer of hope in that Donald Trump could get Tax reform done. This was put into question give the recent political turmoil.
Including in the deluge of expectations is the US GDP figures that are to be released with expectations adjusted downwards. There is also UK PMI numbers that are coming out on Friday.