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The Currency Score analysis is one of the parameters used
for the Ranking and Rating list which was published already this
weekend. Besides this chart I also provide my
weekly analysis on my strategy and the Forex ranking and rating list
which is available 3 times a week on this blog.
The favorite pairs in the Top 10 of this list are being analyzed in more detail here. This article will provide my analysis and the FxTaTrader Currency Score chart which is my view on the 8 major currencies based on the Technical analysis charts using the MACD and Ichimoku indicator on 4 time frames, the monthly, weekly, daily and 4 hours. See for full details the page Currency score explained on my blog FxTaTrader.com. The calculation of the Currency Score difference will not be published. Please check the article Forex Currency Score Wk 50 and the previous ones for the examples.
There are some rules for taking positions according to the FxTaTrader Hybrid Grid Strategy. The strategy can open multiple positions of a currency pair but each currency may only be present once in the pairs chosen for trading in the same direction. It means that not all the possible positions for this coming week can be opened. For more information see FxTaTrader Hybrid Grid Strategy.
Another rule is that a pair outside the Bollinger Band in the Weekly chart is considered overbought/oversold. No positions are taken for these pairs until they are no more overbought/oversold.
Depending on the opportunities that may come up the decision to trade a currency may become more obvious at that moment.
Last week no orders were placed because of lower liquidity in the coming period. Because of lower liquidity in the coming weeks no positions will be opened again because prices act different during periods of lower liquidity and it is not worth the risk. Keeping your balance stable may be the best strategy during these periods. What you don't lose does not need to be earned back again! Meaning that every winning trade that will be opened at a later date is then profit rather than loss compensation.
In the previous weeks we looked into the weaker, stronger and average performing currencies from a longer term perspective using the data of the Currency Score. We also looked into the Currency Score difference. The conclusion was in brief:
For more information the article "Currency score explained" explains in full detail how the currency score is being generated. In my previous articles various aspects have been analyzed as described above. Read the articles of your preference by clicking the links here below, the subjects handled are:
The weaker currencies
The stronger currencies
How to trade the average performing currencies
Using the Currency Score difference for trading decisions
Introduction to the FxTaTrader Forex Models
All preferred combinations comply to the guidelines that define
what type of currency, strong/average/weak, can be traded against the
other. These are classifications from a longer term perspective where 3
months is being used as a reference. The currencies are
classified for the coming week as follows:
For more detailed information about the average performing currencies in the coming period check the Currency Score article Forex Currency Score Wk 50.
DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone.The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.
The favorite pairs in the Top 10 of this list are being analyzed in more detail here. This article will provide my analysis and the FxTaTrader Currency Score chart which is my view on the 8 major currencies based on the Technical analysis charts using the MACD and Ichimoku indicator on 4 time frames, the monthly, weekly, daily and 4 hours. See for full details the page Currency score explained on my blog FxTaTrader.com. The calculation of the Currency Score difference will not be published. Please check the article Forex Currency Score Wk 50 and the previous ones for the examples.
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- The classification of the currencies from a longer term perspective are provided at the bottom of this article for reference purposes.
- There are a lot of changes this week as can be seen in the screenshot.
- The USD, GBP and the NZD are currently the stronger currencies. The AUD, JPY and the EUR are the weaker currencies. The best pairs to look at are combinations of those currencies.
- Currencies with a score of 4 and 5, these are this week the CHF and the CAD are difficult to trade because they are in the middle of the range. Being in the middle of the range means the currency has no clear direction when looking at the whole market and it can easily go in any direction at any time. It is better to have a currency with some momentum in a certain direction because it is then clear how to trade this currency.
- Conclusion for going long is that for the coming week it seems best to go long with the USD, GBP and the NZD. However the NZD is an average performer from a longer term perspective so it does not have the preference unless the currency score difference is significant ( >3).
- For the weaker currencies the conclusion is that for the coming week it seems best to go short with the AUD, JPY and the EUR. These are also weaker currencies from a longer term perspective and from that perspective they have also the preference to be traded short .
There are some rules for taking positions according to the FxTaTrader Hybrid Grid Strategy. The strategy can open multiple positions of a currency pair but each currency may only be present once in the pairs chosen for trading in the same direction. It means that not all the possible positions for this coming week can be opened. For more information see FxTaTrader Hybrid Grid Strategy.
Another rule is that a pair outside the Bollinger Band in the Weekly chart is considered overbought/oversold. No positions are taken for these pairs until they are no more overbought/oversold.
Depending on the opportunities that may come up the decision to trade a currency may become more obvious at that moment.
Last week no orders were placed because of lower liquidity in the coming period. Because of lower liquidity in the coming weeks no positions will be opened again because prices act different during periods of lower liquidity and it is not worth the risk. Keeping your balance stable may be the best strategy during these periods. What you don't lose does not need to be earned back again! Meaning that every winning trade that will be opened at a later date is then profit rather than loss compensation.
___________________________________________
In the previous weeks we looked into the weaker, stronger and average performing currencies from a longer term perspective using the data of the Currency Score. We also looked into the Currency Score difference. The conclusion was in brief:
- a stronger currency can be traded against a weaker and average performing currency.
- a weaker currency can be traded against a stronger and average performing currency.
- the average performing currencies can be traded against the stronger and weaker currencies.
- only trade the average performing currencies against each other when a clear trend is being developed. The Currency Score difference may support this view.
For more information the article "Currency score explained" explains in full detail how the currency score is being generated. In my previous articles various aspects have been analyzed as described above. Read the articles of your preference by clicking the links here below, the subjects handled are:
The weaker currencies
The stronger currencies
How to trade the average performing currencies
Using the Currency Score difference for trading decisions
Introduction to the FxTaTrader Forex Models
Last
3 months currency classification
- Strong: USD / GBP / CHF
- Average: NZD /CAD
- Weak: JPY / EUR / AUD
For more detailed information about the average performing currencies in the coming period check the Currency Score article Forex Currency Score Wk 50.
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This weekend I will also provide the weekly review on my FxTaTrader Hybrid Grid strategy. Good luck to all and have a great trading week.
Although the explanation may seem simple and clear there is always risk involved. I added a disclaimer to my blog for this purpose. If you would like to use this article then mention the source by providing the URL www.FxTaTrader.com or the direct link to this article.
____________________________________________
DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone.The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.
