V.14:10 (441-449): SIDEBAR: The Pathfinder Trading System

The Pathfinder currency trading system uses the same model for trading each of four currency futures contracts - the yen, the Deutschemark, the Swiss franc and the British pound. The trading rules are based on a set of conditions, which in turn are based on the closing values of a set of indicators. The first set of indicators is the six-day, nine-day and an 18-day simple moving average of the currency's daily closing price. A buy alert occurs when today's nine-day moving average crosses above today's 18-day moving average. This is just a buy alert; two more conditions must be satisfied before a long position can be established. The first condition is that today's six-day moving average of the currency's close must be greater than the previous day's six-day moving average value. This condition implies the short-term trend is up.