Relative Rotation Graphs for Forex
A Relative Rotation Graph® (RRG®), developed by Julius de Kempenaer after many years of research, is a complete top-down analysis technique used to look at the relative performance of a Security, Index or even an Asset Class and determine how it is performing relative to the benchmark.
However, because forex pairs are already ratio charts, eg AUD/USD and GBP/AUD the standard RRG chart can’t be used, so clients with the full RRG module have the ability to create forex RRGs.
Opening Forex RRG® Charts
Relative Rotation Graphs can be opened via the New > Multi-code Chart > Forex Relative Rotation Graph menu. By default the chart will open with the currenciies relative to the USD. To select the currencies to be included click the arrow tab on the right scale to open the panel:
You can open a chart for any code displayed on the RRG chart by left-clicking the line. The selected line will display a chart preview window:
Clicking on the chart preview window will open a full-sized chart, with the RRG Lines tool applied automatically.
When you hover over a security on the RRG chart, you will see the tips window:
Date: Displays the date of the data point you are hovering over.
Ratio: Displays the Ratio value of the data point (X Axis).
Momentum: Displays the Momentum value of the data point (Y Axis).
Angle: Represents the current position of the security on the RRG chart
- 90-180 Degrees = Weakening Quadrant
- 180-270 Degrees = Lagging Quadrant
- 270-360 Degrees = Improving Quadrant
0-90 Degrees = Leading Quadrant
Angle ROC: The Angle Rate of Change measures the distance of the angle of the current data point of a security, to the previous data point. The greater the value, the larger the distance between the two data points.
Distance: This number represents how far away the security is from the centre of the RRG chart. Securities with a larger Distance value will appear further from the centre of an RRG chart. One of the observations is that higher alpha comes from those that make bigger arcs, the distance measure allows us to quantify that.
Heading: This is the angle that the arrow is pointing to, 0 for up, 90 for right, 270 left and 180 down.
Velocity: This is the vector difference between the last two dots.
Quadrant: Represents which quadrant the security is currently in, 0 being leading, 1 weakening, 2 lagging and 3 improving.
Close: Displays the symbol and closing price of the security for the selected Date.
Index: Displays the symbol and closing price of the benchmark for the selected Date.
## Actions & Properties
Clone Chart: When selected, an exact replica of the existing RRG chart will be created.
Print Chart: Opens the page in a PDF document, which can then be printed.
Reset Scales: When selected, the RRG chart will reset the zoom level and scaling to its default levels. Pressing Esc on your keyboard will have the same effect. To zoom in or out of the RRG chart, use the scroll wheel of your mouse. You can adjust the X- or Y-scale only by hovering the mouse over the scale and using the scroll wheel of your mouse.
Restore Default Settings: Click this action if you have adjusted the default settings of the RRG, and wish to return to the standard properties originally installed with Optuma.
Save Settings as Default: If you have adjusted any of the RRG properties, you can save the adjustments as your new default setting. Each time you open a new RRG it will display using the new settings.
Send To: This option allows the current chart to be saved as either an image file or saved to the clipboard. If you have Professional Services then the additional options of sending the chart via Chat Message, to Word and Outlook are also available.
Open List As: For all the securities that are included in the RRG, the following can be created: Charts, Scatter Plot Chart, Sector Map, Watchlist, Watchtiles, Relative Comparison Chart and a Spread Chart.
Data Source: If you have a realtime forex data source select the provider.
Benchmark: Select the benchmark currency, eg USD, GBP, or EUR.
Grid View: Click this option to switch from a top-down chart view to a Watchlist style Grid view showing the RRG values (Ratio, Momentum, Distance, Heading, etc.).
Sensitivity: Adjusts the sensitivity of the RRG line calculation, similar to a moving average (lower values = faster reaction, higher values = slower reaction).
Plot Filter: By default, no filter is applied, this can be set to either Manual (you adjust the filter area by dragging the box) or Standard Deviation.
- Std Dev Multiplier: Only available when the Plot Filter is set to Standard Deviation. For example, when set to 2 the RRG will only show those symbols that are more than 2 Std Devs away from the centre.
Chart Size: Allows you to adjust how the chart scaling work. There are 3 options available:
- Manual: Zoom level does not change as the history slider is moved backwards and forwards, allowing items to move in and out of view around the edges of the RRG window. This is the default option and works the same way as earlier versions of Optuma.
- Auto All: As the history slider is moved backwards and forwards the scale of the RRG will adjust automatically to ensure all RRG lines remain in view, including any outliers on the extreme edge of the chart.
- Auto Majority: As the history slider is moved backwards and forwards the scale of the RRG will adjust automatically to ensure most RRG lines remain in view. Any outliers on the extreme edge of the chart won’t be used by the auto scale.
Hint Labels: Displays the list of Hint labels that can be selected. The hint labels are displayed as you roll your mouse over the different securities on the RRG chart.
Timeframe: Change the timeframe of the RRG being displayed, eg 1 Day, 1 Week, etc. If you have a realtime forex data provider you will be able to select intraday timeframes.
Date Range: Sets the date range covered by the RRG.
Tail Styles:** This menu expands to display the properties for the RRG tails.
- Show Tails: When deselected, only a dot point will be displayed for the current value, omitting the tail view from the chart.
- Tail Length: Can increase or decrease the number of days in view on the RRG chart.
- Line Width: Adjusts the width of tail. Moving the slider bar to the right will increase the thickness.
Smooth Tails: When selected, the tail image is smoothed removing any angles.
Display: This menu expands to provide the display options for the RRG. It controls the settings for the RRG grid, background colours, background transparency, scales and black and white printing.
Show Values: Displays a table to the right of the RRG Chart that will list each security with the current values.
Labels: Alters the labels that are displayed on the RRG chart. Can be set to: Code, Name, Name and Code, or no label at all.
Label Colour Style: The labels can be set to use either a single colour for all labels or to use the same colour as the tail.
Label Font Size: Adjusts the size of the label: moving the slider bar to the right will increase the font size.
Scales Font Size: Adjusts the size of the label: moving the slider bar to the right will increase the font size.
Date Control Link: If a price chart for an RRG security is tiled alongside the RRG, selecting this option will display a vertical date line on the price chart. On the charts change the Grouping diamond to a colour and the Date Control Link will appear on chart. The date line can then be repositioned and the RRG will automatically correspond to the selected date position.