How to Use the Interactive Chart

Above you will see the current time-series chart of what I have dubbed the G7 Carry Trade Index. At the top left of the chart you can see the available date ranges (use zoom scale at bottom of chart - current data storage limitations allowing only 2-3 months of data). Click on any of those links to expand or collapse the chart to the time period you wish to view. Sliding the mouse over the range of the chart will reveal individual data points (noted as current and cumulative in the top right) of the time-series.

How to Interpret the G7 Carry Trade Index Data

The chart monitors the series of results generated by our Risk On Risk Off Trading Signals Gadget. Individual results are timestamped (each minute) and summed and then output to the G7 Carry Trade Index chart you see above. As you may or may not know, the Trading Signals Gadget monitors the actual posted transactions data from several of the leading global markets and computes a score (positive indicates increased appetite for risk, negative indicates decreased appetite for risk).

The theory behind the gadget and the time-series chart is that given the gadget monitors the largest, deepest, and most influential financial markets - movements in those markets must have a (future) subsequent impact on smaller, less influential markets elsewhere. Trading (in theory) then becomes a challenge of doing further research to find the relationships between our index and individual assets, markets, or other financial instruments generally.

This is not an exact science, nor does our G7 Carry Trade Index necessarily describe the force of any given single move. What it does instead is monitor multiple successive moves in multiple markets in an effort to reveal the broader trend (which can be normally be easily concealed or manipulated when tracking individual price changes). It is our presumption that by monitoring movements of many markets over several successive time periods reduces the impact of churning or noise and produces a more clear (and hopefully actionable) signal.

We welcome researchers and general market enthusiasts to purchase data sets as they come available to robustly test the index on any number of assets or other securities in order to further knowledge of the movement of financial markets, asset prices, and the impact of the global community of market participants on the markets themselves.

We also encourage or ask market enthusiasts to support this free site with their donations in order to keep this interesting and timely information freely available to those who wish to see it.