1. The U-Shape Currency Bands, S-Curve Currency Bands and the Time Series Currency Bands are based on the bands provided by independent's supplier of bands.
2. The Time Series Currency Band is based on the measurement of time cycles for long term 1, long term 2, medium term (non-sterilization), short term (sterilization), monthly term and the weekly term/inter-days.
3. Interest Rate Differential Based Currency Band is "Equilibrium Exchange Rate", the exchange rate at economic fundamental (EER) and exchange rate at interest rate (EIR).
4. Sterilization policy on the medium term, long term 2 and the long term 1 are different by width of bands.
5. Dollarisation, euroisation and yenisation refer to IMF and central banking technical working papers.
6. Term of Trade = Time Series: (a) Weekly/Inter-Days, (b) Monthly Term, (c) Short Term, (d) Medium Term, (e) Long Term 1 and (f) Long Term 2.
7. A currency pair can be traded for (a) weekly and at the same time for (b) monthly, and at the same time for (c) short, as well as at the same time for (d) medium, to include for (e) long term.
8. Currency bands of major currencies are consisting of USD band, EUR band, JPY band, GBP band, CHF band, CAD band, AUD band and NZD band.
9. Currency bands of non-major currencies are dependent on the FX policies of the central banks (Dollarisation, Euroisation, Yenisation, or Independent Bands), and refer to IMF latest exchange rate regimes.
Unlike traditional trading models, the currency band trading obligates the analysis of all major and derivative currency pairs as a single global band and it consisting of NZD band, AUD band, CAD band, GBP band, EUR band, CHF band and the JPY band jointly managed by the central banks for short, medium and long term price stability. It is like a "single currency in one global band" to by interacting to each other to pressure and support the prices for price stability. At such, central banks limited their attention and management on the short, medium and long term bands/ceilings at which level they agreed on the fluctuation levels.
FX policy is independent of Monetary Policy, and with such condition central banks' releases on monetary policy may impact and may not impact the FX price in the market. As a result, occasionally macro and micro economic news may not have impact on the prices.
By consensus of managed float, the long term directional movements agreed and established as the basis for managing the short term (market sterilization) and the medium term (market non-sterilization). Therefore, most attention paid on the levels of short and medium terms by allowing the exchange rate prices to be fluctuated interior the short and medium terms.
The eight majors pairs (NZDUSD, AUDUSD, CADUSD, GBPUSD, EURUSD, USDCHF, USDJPY) and their derivatives (EURNZD, EURAUD, EURCAD, EURGBP, EURCHF, EURJPY, GBPNZD, GBPAUD, GBPCAD, GBPCHF, GBPJPY, AUDNZD, AUDCAD, AUDCHF, AUDJPY, NZDCAD, NZDCHF, NZDJPY, CADCHF & CADJPY as well as CHFJPY) are moving interior their short and medium term bands/ceiling. They may be moved in harmony and disharmony by the result of market sterilization on the medium term to establish the short term as well as the result of the market non-sterilization on the medium term. As a result, prices become more stable as the common goal of the global central banks.
Accordingly, EURUSD may be upward and at the same time EURCHF downward and at the same time EURJPY downward as well as EURCAD upward and EURAUD downward and the EURNZD upward and at the same time the EURGBP downward. This is caused by the sterilization and non-sterilization for price stability management.
In summary, trading is subject to short, medium and long term directional movement of individual currency of the band with entry levels at the lower of the short and medium term bands or at the upper of the short and medium term bands to target the short and the medium term bands/ceiling. The monthly and weekly terms are part of the short and medium terms.
Therefore, trading could be made and executed on the 28 major and derivative currency pairs at the same time in accordance to their directional movements of the short or medium terms to target their width of short or medium term bands, as well as to target their monthly and weekly levels.
By managing the 28 currency pairs on trading at the same time in accordance to their short or medium terms directional movements, they are hedged to each other if any macro and micro news as well as rumors due to the fact that their prices are related to each other. Thus, the trading is to manage the stop loss to avoid and reduce risks, if any, as well as to manage the risk to risk free. With 28 open trading positions, close profitable positions after reaching or near the targets and hold non profitable positions until profitable.
Having said that, DO NOT MISUNDERSTAND IF I MAY RELEASES MANY TRADING IDEAS" as the opportunity always available every time.
Currency band trading subject to weekly, monthly, short and medium term time frames. By holding 28 open trading positions, some of them generates swab fees/rollover fees and some of them charged for swab costs/rollover costs. These costs and the fees are hedged to each other. The differential is covered by the generated PIPs. Swab costs/rollover costs are one of the source of cash flow for the brokers to enable them to maintain and manage the platform, and therefore it is rationale as market places providers.