System Design  |  APR 1998

The German Mark Noise Channel Breakout System by Dennis Meyers, Ph.D.

The German Mark Noise Channel Breakout System by Dennis Meyers, Ph.D. Interested in a trend-following method for currency markets? Currency markets generally exhibit the strongest tendency to trend, a key feature for trend-followers. Here's a method that's both simple and effective to take advantage of that. Presented here are the rules and steps to develop a trend-following method for currencies. The German mark (abbreviated DM, for Deutschemark) is a major currency traded worldwide by corporations, institutions, banks, commodity funds and futures traders. It is traded 24 hours per day, and most of the world’s largest banks make a two-sided market in it and its associated derivatives. Small traders, however, are constrained to trade the DM futures on the Chicago Mercantile Exchange (CME). German mark futures are traded from 7:20 am to 2:00 pm on the CME and from 2:30 pm to 7:05 am on the CME Globex system. While the CME DM futures trading volume is small when compared with total worldwide bank and institutional trading volume, arbitrage keeps the futures prices in line with the bigger markets.

by Dennis Meyers, Ph.D.