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Money flows: Trading the strongest / weakest major currency cross

  • #261
  • Oct 19, 2017 12:59am Oct 19, 2017 12:59am
Quoting redwed
It's been a while since my last post in ff. ANd one thread that keeps me coming back is this one. I want to share something that is essential in understanding the op's theory. - it is targetting some quick pips. Not swing/daily trading kinda of trade. - if you want to make 10/20 pips per day, than this is the right kinda mindset to think about. - not much indicator involved - thus less confusions. And we're concentrating more on the relation of them (the currencies involved). - Lastly : we're trading forex for profit. Not for debating, whos right...
Hi Redwed

What indicator is painting the long & Short arrows on your charts?

Thanks in advance for your reply

G
Find The Pain Points On Your Chart & Trade Off Those Levels
  • #262
  • Edited 9:34am Feb 10, 2018 12:33am | Edited 9:34am
sharing some findings for all who are on this same journey

I think of reading money flows, as simply as what the word says: flows

it has been a helpful tool that tells me when my trade idea is more likely to work out vs when I should look to scratch my trade. while OP uses it to choose the strongest/weakest pair to trade, I use it as a tool to know when to stay in/get out of a trade

for example, I spot a trade fulfilling my criteria (based on my A game), I take it. it is a long gbpusd trade. 3 mins after I am in, I see eurusd making new highs. at the same time, other majors are ticking up: cadusd, jpyusd, audusd, nzdusd, chfusd. this is a dollar driven move. money is flowing out from usd, & into other currencies/instruments. this is supporting my gbpusd (*edited typo) long trade, giving me reason to stay in it

one will still need to develop his own trading strategy/method to enter trades. if he is struggling in this web of misinformation, consider trading very very simply. observe just price & volume. zero indicators. zoom out on a higher timeframe, draw simple straight lines. when price revisit these lines, focus on the behaviour behind price movements on the lower timeframe. why are participants thinking when price is breaking out of a trendline, what are they thinking when price revisits a new high, etc
  • #263
  • Apr 19, 2018 7:58am Apr 19, 2018 7:58am
Quoting econbizer
...I think of reading money flows, as simply as what the word says: flows...when my trade idea is more likely to work out vs when I should look to scratch my trade...I use it as a tool to know when to stay in/get out of a trade...one will still need to develop his own trading strategy/method to enter trades.
There you go! Spot on.
It is a fluid approach grounded in the fundamentals of how money moves through currencies.
In the end it simply boils down to strength and filtering.
Of course a method/system needs be put in place. No need for 15 indicators nor complex algorithms for you simply hang on to the coattails and follow the money.
Can flows help you filter out better breakouts and/or pullbacks? yes.
Can flows help you filter when and when not to trade? yes.
Can flows keep you on the right side of the market more often than not? yes.
Can flows help you improve your timing into/out of trades? yes.
The difficulty is in learning to read what price and momentum (flows) are telling you, then being able to put together a simple yet stable process to trade (method/system).
What goes on thereafter is down to the traders discipline and psych.

Always question, always learn. Always be willing to unlearn, and simplify.
  • #264
  • May 29, 2018 3:49am May 29, 2018 3:49am
Quoting Tyoon
A very brief daily overview on currencies. .. {image}
Hi where did you get this tool from? Please advice. Tq.
  • #265
  • Jun 12, 2018 3:21pm Jun 12, 2018 3:21pm
good reread,love it
Watch me trade Live on YouTube
  • #266
  • Jun 19, 2019 4:57am Jun 19, 2019 4:57am
Hi,

Has anyone managed to implement this strategy successfully? I've built/calculated my own custom unweighted indexes/charts based on the geometric mean. I've imported data in ForexTester for a more comprehensive historical research. Even though it does provide a quick overview of the market I still have not been able to implement it successfully. Any input is welcome.

Thanks in advance.
  • #267
  • Mar 23, 2020 10:05am Mar 23, 2020 10:05am
It's been awhile.

And now i'm returning to this very thread. And been very grateful to the op.

For your question. It's only rooster mt4 (you can google it). The formula behind it is only rsi.

Quoting GPips
{quote} Hi Redwed What indicator is painting the long & Short arrows on your charts? Thanks in advance for your reply G
  • #268
  • Mar 23, 2020 10:08am Mar 23, 2020 10:08am
Can you explained it further. I saw light at the end of the tunnel. But, it will took me forever to explain my understanding since english is my second language.

Quoting lopatica
Hi, Has anyone managed to implement this strategy successfully? I've built/calculated my own custom unweighted indexes/charts based on the geometric mean. I've imported data in ForexTester for a more comprehensive historical research. Even though it does provide a quick overview of the market I still have not been able to implement it successfully. Any input is welcome. Thanks in advance.
  • #269
  • Jul 8, 2021 10:08pm Jul 8, 2021 10:08pm
liquidity moves markets

where is the money?

use intermarket analysis across all assets, even outside fx. bonds, commodities, equities, commodities
use spread charts. is it time to trade crypto? see btc/spx, btc/xau, btc/tlt.. .. is it time to trade spx? see spx/tlt, spx/xau, spx/qqq.. .. is it time to trade spx or qqq? see spx/qqq. is it time to be in cash? see spx/usd, tlt/usd, commods/usd. is it time to hedge home currency H? see h/usd, h/eur, h/jpy.. ..

intermarket analysis is very discretionary & market context can be similar, with differences
  • #270
  • Jul 9, 2021 8:27am Jul 9, 2021 8:27am
Quoting redwed
It's been awhile. And now i'm returning to this very thread. And been very grateful to the op. For your question. It's only rooster mt4 (you can google it). The formula behind it is only rsi. {quote}
Thank you redwed!

What RSI settings do you use?
Find The Pain Points On Your Chart & Trade Off Those Levels
  • #271
  • Aug 29, 2021 9:45am Aug 29, 2021 9:45am
Quoting econbizer
liquidity moves markets where is the money? use intermarket analysis across all assets, even outside fx. bonds, commodities, equities, commodities use spread charts. is it time to trade crypto? see btc/spx, btc/xau, btc/tlt.. .. is it time to trade spx? see spx/tlt, spx/xau, spx/qqq.. .. is it time to trade spx or qqq? see spx/qqq. is it time to be in cash? see spx/usd, tlt/usd, commods/usd. is it time to hedge home currency H? see h/usd, h/eur, h/jpy.. .. intermarket analysis is very discretionary & market context can be similar, with differences...

This is golden. If only more traders knew this.
  • #272
  • Aug 29, 2021 10:36am Aug 29, 2021 10:36am
maybe make any sense
Attached Image(s) (click to enlarge)
Click to Enlarge Name: market correlation.jpg Size: 114 KB
Click to Enlarge Name: gold-correlations-with-currency-pair-equidious-research-1.png Size: 589 KB
  • #273
  • Sep 3, 2021 10:52pm Sep 3, 2021 10:52pm
Quoting paladin1979
maybe make any sense {image} {image}
ive explored this concept extensively

it is too late to long eurjpy, after seeing eurusd is up + usdjpy is up. going long like this will destroy an account v.quickly. there is 1 use of knowing these triangular correls. to know if you r in a leading or laggard trade. for eg, if you r already in a eurusd long trade & see usdjpy is also up. this means eurjpy was the better long. expect choppy price action for eurusd

we r better off looking at all 3 charts seperately & choosing only to execute on instruments where our setups appear
  • #274
  • May 16, 2022 7:52am May 16, 2022 7:52am
A newbie question

Hi
I am a newbie but already figured out 2 things
1. I like the daily tf.
2. To be successful in the long run it's not about the right strategy but about being able to have a larger view of what is happening in the market.
So I started studying this thread...

I am only on page 2 but already have a (possibly stupid) question.

Let's say for example that I am trading the daily chart for a possible entry.
I want to know if this entry is a high probability one according to the overall strength and weakness of the two currencies in this pair,
or if it is better look at another pair with the same currency.

One of the steps described is looking at the currency index to see the overall strength of each of the currencies at the moment.
Another step is analyzing different crosses to decide which currency is stronger in each of them at the moment.
Now my question is what would be considered as "at the moment".

To illustrate, here are 2 charts

1.NZDCHF
Attached Image (click to enlarge)
Click to Enlarge Name: NZDCHF_2022-05-16_14-23-12.png Size: 32 KB

I can see a pull back in a downtrend.
So considering the downtrend CHF is the strongest in this pair.
But in the last two days the price went up so is NZD the stronger in this pair now?
How recent should I look?

2. EURX
Attached Image (click to enlarge)
Click to Enlarge Name: EURX_2022-05-16_14-01-11.png Size: 31 KB

There is this nice descending triangle but the last two days the price went up.
Does this mean that I should consider the EUR as moving up or down (weak or strong) in this chart?

Thank you very much!
Ask more stupid questions
  • #275
  • Jun 24, 2022 8:59am Jun 24, 2022 8:59am
Quoting Stingy
A newbie question...
Hi, checking in after a long time. same comments as my previous post just above

imo strongest vs weakest is overthinking it
It comes down to trading structures at key levels on any unique chart, & the number of charts you can actively monitor on your watchlist
Just trade the best looking chart

Eg. if you like the daily timeframe, simply draw your horizontal levels. wait for a hammer to form at the level
sloping lines r too subjective
  • #276
  • Last Post: Jun 24, 2022 9:10am Jun 24, 2022 9:10am
The OP suggests trading strongest vs weakest as short term trades. this is a sure fire way to burn newbie accounts
If in doubt, try it

However, strongest vs weakest has a use case for intermarket analysis as spread charts. Not in the manner OP suggests
If you r a long only swing trader or investor who can only allocate your $ into 1 asset, between S&P500 or crypto, open up the spx/btc chart
If spx/btc looks bullish, spx is stronger than btc. but how about other indexes?
is spx stronger than nasdaq? look at spx/nasdaq
is spx stronger than russell? look at spx/russell
is spx stronger than usd? look at spx/usd
.. and so forth

id suggest opening trades near horizontal levels, on the back of lower timeframe structure
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