Forex Liquidity - Post a Comment

Liquidity Chart

The liquidity section provides rough estimates of the trading activity in the forex market. It allows you to understand and view current liquidity and liquidity in previous sessions, in real time. Higher liquidity usually means better spreads as more transactions are being made. The liquidity calculation takes into account many brokers and top 10 traded currencies to calculate the liquidity per each minute for the last 48 hours. You can use the chart zoom in feature to zoom/select a custom timeframe and have the liquidity automatically calculated. The average liquidity of the past 24 hours is used as a 100% liquidity basis for percentage calculation (number of ticks divided by average spread). For example, a 110% reading will tell you that the current liquidity is 10% above the last 24 hours average liquidity. 

You can also see the average session liquidity for the last sessions in the table on the left. 

Since forex is an "over the counter" market, there is no official data about volume and open interest, so liquidity can be estimated by the number of price ticks and spreads; as an example, a high amount of price ticks and low spread will signify a high liquidity, while a low amount of price ticks and a high spread will signify a low liquidity.



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Fear & Greed Index - Post a Comment

What is the Fear & Greed Index?

Investors are driven by two emotions: fear and greed. Too much fear can sink stocks well below where they should be. When investors get greedy, they can bid up stock prices way too far.So what emotion is driving the market now? CNNMoney's Fear & Greed index makes it clear.

We look at 7 indicators:

•Stock Price Momentum: The S&P 500 (SPX) versus its 125-day moving average

•Stock Price Strength: The number of stocks hitting 52-week highs and lows on the New York Stock Exchange

•Stock Price Breadth: The volume of shares trading in stocks on the rise versus those declining.

•Put and Call Options: The put/call ratio, which compares the trading volume of bullish call options relative to the trading volume of bearish put options

•Junk Bond Demand: The spread between yields on investment grade bonds and junk bonds

•Market Volatility: The VIX (VIX), which measures volatility

•Safe Haven Demand: The difference in returns for stocks versus Treasuries

For each indicator, we look at how far they've veered from their average relative to how far they normally veer. We look at each on a scale from 0 - 100. The higher the reading, the greedier investors are being, and 50 is neutral.

Then we put all the indicators together - equally weighted - for a final index reading.

When the S&P 500 (SPX) plummeted to a three-year low on Sept. 17, 2008 - the height of the financial crisis -- the Fear and Greed index sank to 12. The index gained some ground to 28 before stocks finally bottomed out on March 9, 2009 and the latest bull market began.

Most recently, in the first quarter of 2012, stocks staged their best run in decades, and the index showed pure greed.