Skip to main content

Modelling of Currency Exchange Rates Using a Binary Representation

Part of the Advances in Intelligent Systems and Computing book series (AISC,volume 524)


The present article proposes a new method for modeling currency exchange rates in a binary representation, with the exchange rate of AUD/NZD as an example. The binary representation, obtained on the basis of 5-year long tick historical data, is incorporated into a statistical analysis to derive and determine relevant parameters for the model. The model presented in the article makes it possible to approximate the probability of the direction of changes in the currency exchange rate in relation to its preceding changes. The model is characterized by the following features: the independence of its parameters on overriding trends and a possibility of its application to construct automatic prediction systems.


  • Foreign exchange market
  • High frequency econometric
  • Technical analysis
  • Currency market investment decision support
  • Modelling of currency exchange rates

This is a preview of subscription content, access via your institution.

Buying options

USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
USD   129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions


  1. A Statistical Test Suite for Random and Pseudorandom Number Generators for Cryptographic Applications, Special Publication 800–22, National Institute of Standards and Technology (NIST) (2010)

    Google Scholar 

  2. Murphy, J.: Technical Analysis of the Financial Markets. Prentice Hall Press (1999)

    Google Scholar 

  3. Yazdi, S.H.M., Lashkari, Z.H.: Technical analysis of Forex by MACD indicator. Int. J. Humanit. Manage. Sci. 1(2), 159–165 (2013)

    Google Scholar 

  4. Schlossberg, B.: Technical Analysis of the Currency Market. Wiley (2006)

    Google Scholar 

  5. Valcu, D.: Using the Heikin-Ashi technique. Tech. Anal. Stocks Commodities-Mag. 22(2), 16–29 (2004)

    Google Scholar 

  6. Logue, D.E., Sweeney, R.J.: White noise in imperfect markets: the case of the franc/dollar exchange rates. J. Finan. 32(3), 761–768 (1977)

    Google Scholar 

  7. Neely, C.J., Weller, P.A.: Technical analysis in the foreign exchange market. Federal Reserve Bank of St. Louis Working Paper No. (2011)

    Google Scholar 

  8. Lo, A.W., Mamaysky, H., Wang, J.: Foundations of technical analysis: computational algorithms, statistical inference, and empirical implementation. J. Finan. 55(4), 1705–1770 (2000)

    CrossRef  Google Scholar 

  9. Chung, K.L.: Elementary Probability Theory with Stochastic Processes. Springer (1979)

    Google Scholar 

  10. Godbole, P., Papastavridis, G. (eds.): Runs and Patterns in Probability: Selected Papers. Kluwer (1994)

    Google Scholar 

  11. Menezes, A., Van Oorschot, P., Vanstone, S.: Handbook of Applied Cryptography. CRC Press (1996)

    Google Scholar 

  12. Cheung, Y.W., Chinn, M.D.: Macroeconomic implications of the beliefs and behavior of foreign exchange traders (No. w7417). National Bureau of Economic Research (1999)

    Google Scholar 

  13. Oberlechner, T.: The Psychology of the Foreign Exchange Market. Wiley (2005)

    Google Scholar 

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Michał Dominik Stasiak .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and Permissions

Copyright information

© 2017 Springer International Publishing AG

About this paper

Cite this paper

Stasiak, M.D. (2017). Modelling of Currency Exchange Rates Using a Binary Representation. In: Wilimowska, Z., Borzemski, L., Grzech, A., Świątek, J. (eds) Information Systems Architecture and Technology: Proceedings of 37th International Conference on Information Systems Architecture and Technology – ISAT 2016 – Part IV. Advances in Intelligent Systems and Computing, vol 524. Springer, Cham.

Download citation

  • DOI:

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-46591-3

  • Online ISBN: 978-3-319-46592-0

  • eBook Packages: EngineeringEngineering (R0)