U.S. Dollar Regains Positions on Mixed Fundamentals

Today, EUR/USD lost a small part of the pips that were gained yesterday after the Fed’s interest rate cut by 0.50%. Even the bad employment statistics didn’t prevent dollar from recovering from 1.4860 to 1.4814 against European currency. This can be also partially explained by the major resistance level that has formed near 1.4870 rate on EUR/USD.

Personal income in December rose by 0.5% — better than the analysts expected (0.4%), which can be a good sign for U.S. economy. Personal spendings were at 0.2%, higher than the expected value, but lower than 1.1% growth a year earlier. Core PCE inflation, as expected, didn’t change and was at 0.2% last month.

Initial jobless claims report showed a very disappointing dynamic this time — last week claims grew up from 306,000 (revised from 301,000) to 375,000 — that’s much more than 320,000 predicted by the economic experts.

Chicago PMI — the index of business purchasing activity — fell below the expectations (53.0) fro, 56.4 to 51.5.

Crude oil inventories in U.S. continued weekly growth trend and rose 3.6 million barrels last week, which is nothing but a good sign for the dollar, as the oil prices may stop affecting it negatively.

Dollar Falls after FOMC Lowers Interest Rates

The main intrigue for today Forex trading session was the FOMC’s meeting at which the next interest rate should have been decided. As the most market participants expected FOMC lowered overnight interest rate in U.S. by 0.50% to 3.00%, farther widening the gap between U.S. and European interest rates. The decision was made under the pressure from the deepening crisis in the both housing and financial markets. EUR/USD jumped up by almost 100 pips after the release, showing that the dollar is going to be less attractive currency with the new 3% interest rate.

Another important statistics report came out today — it was the GDP growth for the fourth quarter of 2007. It grew far worse than the analysts expected — 0.6% compared to forecasted 1.2%. Now the signs of recession given by the real estate sector, financial market and employment situation have got confirmed by the economy output.

Forex Trading Edge — New MetaTrader 4 Broker

Recently I’ve been contacted by the manager of Forex Trading Edge. It’s quite a new Forex broker that started to operate near the end of 2007. Forex Trading Edge is the introducing broker for Forex.com broker. Usually I don’t like to list the introducing brokers as the separate entities, but this one got my attention, because it offers a MetaTrader 4 platform, something that Forex.com is missing. Besides MT4, it also offers original trading platform of Forex.com and the NinjaTrader platform. Payments methods are limited — only wire transfer, checks and credit cards — no e-currencies. Another disadvantage that Forex Trading Edge has is that it’s not accepting citizens of the United Kingdom. But for other Forex traders that wanted to join Forex.com, but prefer MetaTrader 4 over other platforms, this is definitely a good choice.

Slight Strengthening of Dollar

Good fundamental macroeconomic data that was coming out today helped the U.S. dollar to fight back some of the pips, lost to euro yesterday. EUR/USD began this day at 1.4779, but now it hovers near the 1.4756 level. It's not a big gain for the greenback, but it has a potential to continue the trend during the rest of the week.

Durable goods orders in December unexpectedly rose by 5.2%, which is a lot higher than the 1.5% expected by the markets. This indicator has a strong influence on the U.S. economy and also the Forex market, so it can be a really positive news for dollar.

Consumer confidence surveyed by the Conference Board landed at 87.9 in January, after it was 90.6 in December (revised from 88.6). So, it really fell a just little down, but it's still better than forecasted 87.0.

Forex Research Paper on Volatility, Spreads and Quotes Frequency

Now you can download a new free research paper related to the Forex market from the e-books section of my site. It is "The Interaction Between the Frequency of Market Quotes, Spread and Volatility in Forex" that was published in the Applied Economics journal more than 10 years ago. This paper researches the relations between volatility, spreads and the frequency of the new market data in the Forex. It can be considered outdated for the majority of the modern traders, but it can help in understanding of how the interbank Forex market works. This e-book is definitely not for the general traders' community, but it holds a lot of information for the experienced and professional traders.

Support and Resistance MetaTrader Indicator

Enjoy the new MetaTrader indicator — Support and Resistance — ready to be downloaded from the indicators page. This indicator shows the dynamic support and resistance levels directly on the chart. It applies the levels to the certain periods that are treated as the trends or sub-trends. This indicator was originally developed by Barry Stander (http://myweb.absa.co.za/stander/4meta/), but I have received by e-mail from one of my reader — Muntazir Mehdi. So, thanks should go to both of them. And I hope to receive and publish even more of such interesting and yet simple Forex indicators.

Forex Technical Analysis for 01/28-02/01 Week

EUR/USD trend: sell.
GBP/USD trend: hold.
USD/JPY trend: buy.
EUR/JPY trend: hold.

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	98.3103	49.8734	98.3517	49.9148	98.3931	49.9562	98.4345
GBP/USD	1.8987	1.9162	1.9497	1.9672	2.0007	2.0182	2.0517
USD/JPY	102.27	103.62	105.18	106.53	108.09	109.44	111.00
EUR/JPY	145.84	148.98	152.84	155.98	159.84	162.98	166.84

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	74.1022	146.8093	74.1436	146.8507	74.1850
GBP/USD	1.9162	1.9497	1.9672	2.0007	2.0182
USD/JPY	103.62	105.18	106.53	108.09	109.44
EUR/JPY	148.98	152.84	155.98	159.84	162.98

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	146.8072	146.8186	146.8224	146.8262	146.8338	146.8376	146.8414	146.8528
GBP/USD	1.9551	1.9691	1.9738	1.9784	1.9878	1.9925	1.9971	2.0112
USD/JPY	105.13	105.93	106.20	106.46	107.00	107.26	107.53	108.33
EUR/JPY	152.86	154.79	155.43	156.07	157.35	157.99	158.64	160.56

Tom DeMark's Pivot Points:
Pair:	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
Resistance:	1.4938	1.9840	108.77	161.41
Support:	1.4524	1.9330	105.86	154.41

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4779	1.9848	107.89	159.11
61.8%	1.4621	1.9653	106.78	156.44
50.0%	1.4572	1.9593	106.44	155.61
38.2%	1.4523	1.9533	106.09	154.78
23.6%	1.4463	1.9458	105.67	153.76
0.0%	1.4365	1.9338	104.98	152.11

Euro Rises as Dollar Weak on Average Releases

Today EUR/USD again showed a good level of gains, recovering from the major drop that was seen on Monday. It's already up by almost 0.8% and is looking strong. The reason for this behavior lies in the good Eurozone fundamental data and average data from U.S. today.

Initial jobless claims report for the last week showed an insignificant drop by 1,000 compared to previous 302,000 (which has been revised up from 301,000). The analysts expected a growth to 320,000 that week.

The report by National Association of Realtors on Existing home sales in December showed a bigger than expected decline — to 4.89 million from 5,00 million in November (annually adjusted).

Crude oil inventories in U.S. continued to grow in the past week, rising up 2.3 million barrels, compared to previous value. This growth can mean a domestic demand decline and the wish to increase the inventories while the oil prices are quite low.

Float - New Addition to MT4 Indicators

One of my site's visitors asked me abouth the MetaTrader 4 indicator called "Float". So I've decided to find this one and add it to the MT4 indicators list I maintain. Now everyone can download this interesting indicator and try to use it in Forex trading. It is designed to detect big trend changes and the current trend 'exhaustion level'. As the bonus it also shows the Fibonacci levels on the main chart window to help the traders to determine good support and resistance levels. It would be fair to say that this indicator comes from StrategyBuilderFX forum's members and is currently no longer updated.

LiteForex Adds e-Bullion and Liberty Reserve

A good news from the LiteForex broker. Yesterday they announced that they are adding e-Bullion and Liberty Reserve on-line payment systems as the options to deposit funds into the Forex trading accounts. Although these systems are less popular than WebMoney or e-gold, which are already supported by LiteForex, it is a good addition for a Forex broker as it adds comfort to the traders' necessary routines of accounting. Unfortunately it can't be used to withdraw funds yet, but maybe soon it will be changed too.

Mathematics of Money Management Forex E-Book

Now you can freely download another money management in trading related Forex book from my site — Mathematics of Money Management: Risk Analysis Techniques for Traders. It is written by Ralph Vince, the author of many books about the use of math in trading. Although this e-book is quite heavy on mathematics (calculus and statistics) it's intended for the general readers — both for those that are fluent in numbers and those that are not. You'll find some working methods and formulas there, that, if used in your own money management strategies, should help you to avoid many of the problems financial traders encounter. It's quite a big e-book and isn't very easy to understand, so be prepared for some long read.

Forex Technical Analysis for 01/21-01/25 Week

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: sell.
EUR/JPY trend: sell.

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.4167	1.4378	1.4499	1.4710	1.4831	1.5042	1.5163
GBP/USD	1.9169	1.9340	1.9447	1.9618	1.9725	1.9896	2.0003
USD/JPY	102.49	104.20	105.53	107.24	108.57	110.28	111.61
EUR/JPY	148.20	151.94	154.07	157.81	159.94	163.68	165.81

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.4356	1.4453	1.4688	1.4785	1.5020
GBP/USD	1.9340	1.9447	1.9618	1.9725	1.9896
USD/JPY	104.20	105.53	107.24	108.57	110.28
EUR/JPY	151.94	154.07	157.81	159.94	163.68

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.4436	1.4528	1.4558	1.4589	1.4649	1.4680	1.4710	1.4802
GBP/USD	1.9400	1.9477	1.9502	1.9528	1.9578	1.9604	1.9629	1.9706
USD/JPY	105.18	106.01	106.29	106.57	107.13	107.41	107.69	108.52
EUR/JPY	152.96	154.58	155.11	155.65	156.73	157.27	157.80	159.42

Tom DeMark's Pivot Points:
Pair:	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
Resistance:	1.4937	1.9672	109.43	161.81
Support:	1.4605	1.9394	106.39	155.94

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4922	1.9790	108.96	161.56
61.8%	1.4795	1.9684	107.80	159.32
50.0%	1.4756	1.9651	107.44	158.63
38.2%	1.4717	1.9618	107.08	157.93
23.6%	1.4668	1.9578	106.64	157.08
0.0%	1.4590	1.9512	105.92	155.69

EUR/USD Down for 4th Day

Euro is dropping down against the U.S. dollar for the fourth day in a row now. Declining stock markets force traders to cash out into dollars, increasing the demand for them. Today's fall is minimal (less than 20 pips), but still keeps euro from rising and dominating over the dollar as it has been doing in 2007.

Leading indicators in U.S. released by the Conference Board showed a decrease in December by 0.2% after 0.4% drop in November, but still worse than 0.1% decline that was expected by the markets.

Reuters/University of Michigan released the preliminary results of its sentiment index today showing the unexpected rise from 75.5 to 80.5, while analysts expected a drop to 74.5.

Euro Tries to Regain Yesterday Loss

Euro tries to reclaim the pips it lost yesterday during one of the strongest falls of the recent days. Yesterday EUR/USD lost 152 pips or more than 1% of its rate. Today only a small recovering is seen with no more than 30 pips trailback, which can be easily accounted to the technical correction. Overall picture of the EUR/USD daily chart more and more reassembles the "head and shoulders" pattern. Some average fundamental data were released today and are not currently affecting the dollar.

Housing data from U.S. was disappointing today. Building permits in December fell by a larger extent than it was expected going down 1,162,000 to 1,068,000. Meanwhile the housing starts for the same month dropped to 1,006,000 from 1,173,000 (revised from 1,187,000).

Initial jobless claims fell down by 21,000 and were at just 301,000 last week, while growth from 322,000 to 335,000 was expected by the market analysts.

Philadelphia Federal Reserve's business activity index in January unexpectedly fell to -20.9, the lowest value since the October 2001, when it fell down after 9/11 attacks.

Euro Down Fastest Since December

EUR/USD unexpectedly fell today after the moderate fundamental statistics were released in the United States. This currency pair declined from 1.4803 opening price to 1.4656 making it the largest daily drop for EUR/USD since December 14.

CPI (Consumer Price Index) in December showed a better than expected growth, increasing by 0.3% - still lower than in previous month (0.8%), but above the forecasted 0.2%.

Net foreign purchases of the long-term securities in November were at quite a high level - $90.9 billion, but lower than October's $114.0 billion.

December's industrial production stalled with 0% change, but that can be considered a good news, because the negative change has been expected. Industrial capacity utilization dropped slightly, going down from 81.6% (revised from 81.5%) to 81.4%.

U.S. crude oil inventories last week showed a gain at last increasing by almost 4.3 billion barrels after the previous report of 6.7 billion barrels dropdown.

Retail Sales for December Disappoint Dollar Bulls

EUR/USD has been ranging up and down through the whole day as the Forex traders were expecting the release of the important fundamental data today. After the retail sales report for December came out, euro started to gain at a fast pace against the U.S. dollar and broke the important resistance level of 1.4900.

December advance estimate of the retails sales fell down by 0.4% after a 1.2% growth a month earlier, while a stagnation at 0% was expected by the majority of the analysts.

PPI (Producer Price Index) in December, seasonally adjusted, fell down by 0.1%, while a moderate growth of 0.2% was forecasted after the November's 3.2% growth.

New York Empire Manufacturing survey showed that this important manufacturing index fell down in January to 9.0 from 9.8 in December. The mean consensus for this index was at 10.0.

Manufacturers' and trade inventories (seasonally adjusted) in November 2007 went up in accordance with the experts' expectations - by 0.4% after October's low 0.1% growth.

New Science of Technical Analysis

I uploaded a new Forex e-book to the site today - it's called "The New Science of Technical Analysis". It was written by Thomas R. DeMark, one of the founders of the modern technical analysis and developer of the DeMark's pivot points. This book is more suited for the experienced Forex traders, because it goes quite deep into the techniques of chart analyzing, while being not very entertaining (of course, hardcore Forex traders will be entertained by such precious knowledge itself, but that's another story ☺). The book is divided into 13 chapters with each of them describing a certain pattern or behavioral aspect of trading. Definitely - a good read for those who think that they know a lot about Forex trading.

Forex Technical Analysis for 01/14-01/18 Week

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: hold.
EUR/JPY trend: sell.

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.4493	1.4567	1.4671	1.4745	1.4849	1.4923	1.5027
GBP/USD	1.9077	1.9280	1.9422	1.9625	1.9767	1.9970	2.0112
USD/JPY	106.41	107.40	108.12	109.11	109.83	110.82	111.54
EUR/JPY	157.35	158.64	159.71	161.00	162.07	163.36	164.43

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.4575	1.4687	1.4753	1.4865	1.4931
GBP/USD	1.9280	1.9422	1.9625	1.9767	1.9970
USD/JPY	107.40	108.12	109.11	109.83	110.82
EUR/JPY	158.64	159.71	161.00	162.07	163.36

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.4678	1.4727	1.4743	1.4760	1.4792	1.4809	1.4825	1.4874
GBP/USD	1.9374	1.9469	1.9501	1.9532	1.9596	1.9627	1.9659	1.9754
USD/JPY	107.89	108.36	108.52	108.67	108.99	109.14	109.30	109.77
EUR/JPY	159.49	160.14	160.36	160.57	161.01	161.22	161.44	162.09

Tom DeMark's Pivot Points:
Pair:	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
Resistance:	1.4797	1.9696	110.33	162.72
Support:	1.4619	1.9351	108.62	160.36

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4818	1.9828	110.11	162.28
61.8%	1.4750	1.9696	109.46	161.38
50.0%	1.4729	1.9656	109.26	161.10
38.2%	1.4708	1.9615	109.05	160.82
23.6%	1.4682	1.9564	108.80	160.48
0.0%	1.4640	1.9483	108.40	159.92

Dollar Steady Even After Trade Balance Deficit Widens

The dollar showed a mild growth against the euro today even after the trade balance report showed the widening of the deficit. Against the Great Britain pound the U.S. dollar also went up, with GBP/USD hitting the lowest value since march - 1.9481, but lost the most of the gain after the trade balance release.

The U.S. international trade balance deficit increased in November from $57.8 billion to $63.1 billion as the imports grew ten times faster than exports. Both average export and import prices rose by 0.3% - slowly than in October.

Treasury budget numbers for December were also reported today showing the surplus of more than $48.2 billion - a higher surplus than in December 2006 (almost $42.0 billion), but still lower than the expected $52.0 surplus for December 2007.

Interest Rate Decision's Influence on EUR/USD

Today the European Central Bank decided to leave the interest rate unchanged at 4.00%, as it was expected by the markets. But the EUR/USD went up after the decision became known - the currency pair gained more than 70 pips. What has caused that? Along with the rate decision ECB announced another $20 billion intervention to the banks to add more dollar liquidity. That greatly cut the dollar's position on Forex, especially against European currency.

Positive to the U.S. dollar was the weekly report on the initial jobless claims - last week they dropped from 337k to 322k, while a gain up to 340k has been anticipated by the market analysts.

Wholesale inventories (business) rose up by 0.6% compared with the October's 0% unchanged value. Economic strategists forecasted only 0.4%, so this is a good news for dollar bulls.

Random Forex Trading - Expert Advisor

Recently I was reading about the random walk hypothesis and I've got interested in this idea. So, I though that it would be really fun to develop a MetaTrader expert advisor that will trade completely random. No indicators or other ways to base the forecasts on the past data, just a plain "coin flipping". After several days of coding and testing (testing mostly) the myRandom expert advisor was ready. It enters the positions based on the 0.5 probability for each direction; it has also six parameters to control its trading. I am not sure if someone will use it on their real account, but backtesting showed some positive results - so everything is possible. Please, contact me if you get some interesting results with this EA.

MetaTrader Indicators User's Tutorial

There are many free MetaTrader indicators available on-line, but some people still enounter problems in attaching these indicators to a chart or even compiling them when needed. This simple user's tutorial was made by me for those that want learn attaching custom MT4 indicators.

1. Download custom MT4 indicator and save it to the 'indicators' folder inside the 'experts' folder inside your MetaTrader's installation folder:

2. If it's already compiled (.ex4 file) then fine, if not (.mql file) - double click it with your mouse and it will be opened in MQL editor (this editor is standard for every MetaTrader 4); click the 'Compile' button at the center top of the editor window - the indicator will be compiled and ready to be attached. There might be some errors or warnings during the compilation, but in most cases there shouldn't be any. You can try and fix those errors, but usually it takes some time and programming skills to do this.

3. After you get the .ex4 file in your indicators folder (through compilation or download), you can start using it with your MetaTrader platform. All you have to do is to attach it to the chart. If you know what you are doing you might also want to change some of the indicator's input parameters.

OK. Now you can enjoy your new MT4 indicator and hopefully - better Forex trading results.

Carnival of Forex Trading - January 6, 2008

Welcome to the January 6, 2008 edition of Carnival of Forex Trading.

Ian Welsh presents Has the Dollar Hegemony's Tipping Point Been Passed? posted at The Agonist, saying, "Being the standard reserve currency mattered. Knowing when the switch is occuring will be important for betting the trend."

Vahid Chaychi presents Is Forex a Suitable Job for Everybody? posted at Weboma.com, saying, "Forex is good job but it is not suitable for everybody. In addition to knowledge and experience, it needs proper mental and psychological situation." The same author also presents another article on the topic of the Forex career - When You Will Be A Professional Forex Trader? posted the same site.

Dr. Barry Burns presents The Energy of Fractals posted at Top Dog Trading, saying, "How to see what a Forex market is likely to do in the future?" The same author also presents Good Trading MUST Feel Unnatural! Here's Why?, saying, "Does it every seem strange how the Forex market seems to always do exactly the opposite of your trade? It's actually the most natural thing in the world for that to happen! Here's how to understand that and also how to overcome it." And its second part - Good Trading MUST Feel Unnatural, Part 2., saying, "Most Forex traders do not make money because they aren't willing to do what successful traders do. It's pretty much that simple. Here's exactly what successful traders do that makes them profitable ... ironically the amateurs could do it too, but they honestly don't think it's important, so they keep looking for answers in all the wrong places and continue spinning their wheels."

Sagar presents Comparison: Major Presidential Candidates on Monetary Policy and the USD posted at Currency Trading.net. Another article, submitted by the same author is 20 Reasons Why a Falling Dollar Isn?t Necessarily a Bad Thing.

That concludes this Carnival of Forex Trading edition. Only four authors posted the relevant and interesting articles this time, but almost all of them submitted more than one article, so there is something to read about Forex at the end of the week.

Forex Technical Analysis for 01/07-01/11 Week

EUR/USD trend: sell.
GBP/USD trend: hold.
USD/JPY trend: sell.
EUR/JPY trend: sell.

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.4340	1.4454	1.4597	1.4711	1.4854	1.4968	1.5111
GBP/USD	1.9144	1.9409	1.9573	1.9838	2.0002	2.0267	2.0431
USD/JPY	102.01	104.96	106.78	109.73	111.55	114.50	116.32
EUR/JPY	151.94	155.84	157.96	161.86	163.98	167.88	170.00

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.4461	1.4613	1.4718	1.4870	1.4975
GBP/USD	1.9409	1.9573	1.9838	2.0002	2.0267
USD/JPY	104.96	106.78	109.73	111.55	114.50
EUR/JPY	155.84	157.96	161.86	163.98	167.88

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.4600	1.4670	1.4694	1.4717	1.4765	1.4788	1.4812	1.4882
GBP/USD	1.9502	1.9620	1.9659	1.9699	1.9777	1.9817	1.9856	1.9974
USD/JPY	105.99	107.30	107.74	108.17	109.05	109.48	109.92	111.23
EUR/JPY	156.77	158.42	158.98	159.53	160.63	161.18	161.74	163.39

Tom DeMark's Pivot Points:
Pair:	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
Resistance:	1.4783	2.0135	113.03	165.93
Support:	1.4526	1.9706	108.26	159.91

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4824	2.0102	112.67	165.76
61.8%	1.4726	1.9938	110.85	163.46
50.0%	1.4696	1.9888	110.29	162.75
38.2%	1.4665	1.9837	109.72	162.04
23.6%	1.4628	1.9774	109.03	161.16
0.0%	1.4567	1.9673	107.90	159.74

EUR/USD Soars on Disastrous Employment Data

EUR/USD showed a growth of more than 100 pips in one hour immediately after the employment data from the United States were released today. While trading flat and even falling a little during the day, EUR/USD broke through its own record level setting a new historical maximum to 1.4824.

Nonfarm payrolls growth was expected to fall from 94k in November to 70k in December, but the released data was a real catastrophe - just 18k growth. Meanwhile the unemployment rate rose from 4.7% to 5.0% showing that the problems in the U.S. economy are going to be really serious.

ISM services index in December showed a less dramatical decline dropping to 53.9% from 54.1% in November, while a drop to 53.5% was expected.

MetaTrader History Data Importing and Converting Tutorial for Quality Backtesting

Backtesting MetaTrader expert advisors on historical data is a good way to test a strategy. But testing on the limited data supplied with MT4 installation gives a very poor quality of testing (usually below 50%). So, how to achieve a 90% quality in backtesting of MT4 expert advisors? It's not that hard really, just follow this simple tutorial and you will able to test any MetaTrader EA.

1. Download a new MetaTrader 4 installation and install it to a separate folder. Be advised that a good MetaTrader historical data take up a lot of disk space, so install it to a drive with at least 1-2 Gbytes of free space. For download MT4 installation I recommend official MetaQuotes site.

2. After you install your MT4, don't run it yet. Go to the folder you have installed it to. Go the 'history' folder there and delete all folders there (the actual folders names inside the 'history' folder may be different from those on these pictures):

3. Run the newly installed MetaTrader and open a free demo account with whatever broker it will be offering to you (official MetaQuotes installation offers random brokers for demo account opening in its MT4). Login to your account and close all open charts (if any).

4. Adjust the MetaTrader options to allow larger charts (more bars in history):
The close your MetaTrader.

5. Download a quality historical data for every currency pair you want to test your expert advisor on. I recommend Alpari History Center for this - download M1 data for each of the currency pairs you need.

6. Unzip the archive with M1 historical data somewhere. Rename it to comply with MT4 standard naming - i.e. EUR/USD M1 chart should be named EURUSD1.hst, GBP/USD M1 should be renamed to GBPUSD1.hst, etc.

7. Copy the renamed history file to your MetaTrader's 'history' folder into your broker's folder (overwrite if prompted):

8. Launch MetaTrader 4 again. Don't open any charts on-line, open your downloaded M1 chart offline (example shown for EUR/USD chart):

9. It might take some time for the actual chart to load, but it's OK. Now you need to convert M1 history to every timeframe you will need. For this you need to use a period_converter script which is a standard feature of all MT4 platforms. Run it from the Scripts tab and set its ExtPeriodMultiplier input parameter to the number of minutes in the desired output timeframe. For M5 enter 5, for M15 enter 15, for M30 enter 30, for H1 enter 60, for H4 enter 240, for D1 enter 1440, for W1 enter 10080, MN isn't convertible as there is no fixed amount of minutes in one month:
10. Wait for the script to finish its work (may take up some time; it's more than 2 years of data after all):

11. Repeat steps 8-10 for all timeframes you want to get.

12. Repeat steps 5-11 for all currency pairs you want to test your MT4 EAs on.

13. Voilà! Now you can enjoy a 90% quality backtesting and test every expert advisor you want on the time periods of more than 2 years. Good luck with your trading!