Currency Strength

I believe that regardless of what setups you are using, you should always pair the weakest currency against the strongest currency. The first step is to determine your timeframes. I personally look at 2 time frames above the chart I make entries on.

In my case, entries come on the 15 Minute Chart. To determine strength, I do my analysis on the 1 Hour and 4 Hour charts. I like this combination because everything is divisible by the same number which is 4. This is a personal quirk of mine. In my opinion, it does not matter what you use as long as you are consistent.

The obvious question becomes how do you determine strength, right?

There are many ways to do this and everyone will gravitate to what they like. Personally, these are the indicators I use on the 1 hour and 4 Hour charts to come up with a score.

1. SAR
2. MACD Histogram
3. 10 EMA
4. 20 SMA
5. 50 SMA
6. 100 SMA
7. 200 SMA

All of the Moving Averages are scored twice. The first is whether price is above or below and the second is the angle. The price could also be the same as the MA and the angle could be up, down or flat.

I hope this helps because in my experience, this has been the determining factor in becoming a successful trader.
Please Skip to Post #17

I usually pick one pair to look at each day based on my scoring system. I will try and make a post each day with the choice. If there are 2 or more pairs really close, I will post them in order of strength.

Today, we have a clear winner. The Euro is clearly the strongest for the two time frames I look at, the 1 Hour and 4 Hour. The weakest is the the Yen. In my case, this means I will be looking to get long EURJPY today.

The EURJPY was strong today as was the second strongest pair the CADJPY. I did trade trade the EURJPY.

Today the GBP and USD are the strongest with AUD the weakest. So the GBPAUD long and AUDUSD short are the pairs to focus on today for me.

Can you please post some charts on how you determine the strength of each pair? or even each currency.

I simply pick one pair as my base which is the USD. You can use any pair you like. I then look at the charts of the USD paired with the other 7 Majors. One or two will stand out as very strong and one or two as very weak. it's not that complicated/

please post some charts, thanks,

My posting charts is not going to help anyone learn to do this for themselves. Once you do it a couple times you will be a pro at finding the strongest pairs to trade your favorite timeframes.

You can do as I do and do your work on the 4 Hour and 1 Hour. You would then look for entries on the 15 minute chart. It doesn't matter as long as you are consistent. Maybe you want to analyse the Weekly and Daily and enter on the 4H.

Do you really want to learn this and become convicted? Read my first post and post your charts. I will analyse and comment. If you are looking at the timeframes that I use, you can compare your choices with what I come up with.

One last thing, you do not need to come up with the same choices as me. Of course, most of the time things are fairly obvious and your choices will be the same.

I promise you that this one learned skill will change the way you trade and hopefully, it will be what is needed to make you a full time profitable trader.

Thanks 6200trading,
I compared EUR and CAD 22/06/2023, H4 and H1 timeframe, looks CAD is stronger than EUR, as MA200 in EURUSD H4 is down, please check.

On the 22nd at the start of the US session, EUR and CAD were very strong. JPY was weak. For Friday, GBP was strong as was the USD at the start of the session and AUD was the weakest.

I'll say it again. Pick one currency as your basis. I use USD. If USD is either weaker than all or stronger than all, it is my choice. If not, I use the currency that is strongest against the dollar and weakest against the dollar as my pair..

I have heard that people have created a symbol that pairs USD against all the majors on a single chart, another for GBP, EUR, JPY, CHF, CAD, AUD and NZD That would make it easier but I do it the old fashioned way.

Let's say CADJPY, with CAD the strongest currency and JPY the weakest as they have been recently. Got it? Now use your favorite trading setup ONLY taking long signals.

CAD and CHF are strong tonight and JPY is again the weakest. AUD is second in weakness.

CHF and CAD are the big dogs and JPY and AUD are the weakest still this morning. I'll be looking at CADJPY long, CHFJPY long, AUDCHF short and AUDCAD short.

This morning EUR is the strongest and JPY is the weakest. I will be looking to get long EURJPY.

I am keeping this thread going because it helps me journal the daily pairs I am looking at and to refer back when I review my work. Of. course, if I can help someone along the way that is always a good thing.

I will say this again i another way.... When you know which currencies are strong and which are weak, half (or more) of the battle is done. My work in preparing for each trading day is honing in on the strongest and weakest pairs relative to the 4H and 1H charts. I then plan to make an entry based on buying the strong and selling the weak.

Notice the title of the thread is Currency Strength and has nothing to do with setups. Setups are a dime and dozen and most published setups work under favorable conditions. My point being you can use any setup you like when planning and making entries..

Finally, please contribute. The more minds in this mastermind group the better.

This morning the USD and EUR are the strongest with NZD being the weak one. I am looking for a short entry on NZDUSD and a long entry on the EURNZD.

Strength in the EUR and CHF this morning. GBP and CADS are weak.Looking to:
Long EURCAD
EURGBP
short GBPCHF
CADCHF

This is how I go with the Currency Strength.
I'm using equally weighted indices (besides the DXY) and will do a multi-timeframe analysis on those baskets. I'm using SMA's and simple PA to determine the strongest and weakes currencies.

Today:
Strong: NZD, USD.
Weak: CHF, EUR.

Below a picture of how this is looking like.