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both sides of pair for confirmation of trend

  • #1
  • First Post: Mar 19, 2011 4:33am Mar 19, 2011 4:33am
I have been reading The Threat Long Term Pips. He talks about parallel and inverse analysis on Both Sides of pairs for confirmation of trend. how do you do it? I really need help =)

I take EURUSD as an example. I know that the eur is stronger than usd, but he talks about a number of couples that start with eur and usd, and check what is the strongest or weakest of them.
  • #2
  • Mar 19, 2011 5:24am Mar 19, 2011 5:24am
If you think that EUR/USD is bullish, you can double check that by checking that the euro is bullish in other EUR pairs, such as EUR/JPY, EUR/GBP, EUR/CAD, etc., and then by checking that the US dollar is bearish in other pairs, such as USD/JPY, GBP/USD, USD/CAD, etc. That way you'll confirm your trend on the pair of choice by seeing the current trends on other pairs.
  • #3
  • Mar 19, 2011 4:14pm Mar 19, 2011 4:14pm
Quoting d0MiN077
I have been reading The Threat Long Term Pips. He talks about parallel and inverse analysis on Both Sides of pairs for confirmation of trend. how do you do it? I really need help =)

I take EURUSD as an example. I know that the eur is stronger than usd, but he talks about a number of couples that start with eur and usd, and check what is the strongest or weakest of them.
never read the thread you refer to, but he might just look which currency is strongest, not which pair. And that's why he looks at several currency pairs with the same currency.
  • #4
  • Mar 19, 2011 6:47pm Mar 19, 2011 6:47pm
Quoting d0MiN077
I have been reading The Threat Long Term Pips. He talks about parallel and inverse analysis on Both Sides of pairs for confirmation of trend. how do you do it? I really need help =)

I take EURUSD as an example. I know that the eur is stronger than usd, but he talks about a number of couples that start with eur and usd, and check what is the strongest or weakest of them.
the eu and us are both in deep shit now. both face mountains of debt and eu face the grim prospect of breaking up politically.

so which one do you sell??

the euro just went up to 1.41792 against usd. what is the reason?? is it better than the usd!! no, it's just that the market has a lot of demand for it and bought a lot of it. the forex market is influenced by the banks and hedge funds. depending on what report and news they get. they will form an opinion and act on it and push the currency to where they want.

1 moment ago they are a buyer then the next they are a seller. so what gives?? if you know anyone of these asshxxxs, pls ask them for me.

just buy when it goes up and sell when it comes down. you don't know what the banks and hedge funds THINK of the currency until they show their hand. thanks
  • #5
  • Mar 19, 2011 8:20pm Mar 19, 2011 8:20pm
Quoting winningfx
the eu and us are both in deep shit now. both face mountains of debt and eu face the grim prospect of breaking up politically.

so which one do you sell??

I think you are mixing up fundamental and technical analysis. Previous posters were analyzing the technical strength of a currency's move. They didn't indicate the TF they were checking, but assuming it was less than daily, the fundamentals don't come into play except at news announcements and its best to avoid those situations in any case. If you are looking at daily and higher TF, then I suppose fundamentals matter, but you could also improve the odds by taking the technical strength into account.
  • #6
  • Edited 6:32pm Mar 20, 2011 8:37am | Edited 6:32pm
Since the OP has not taken my advice in his previous thread, i will tell you my opinion. first, do a google search on that topic, just as i told you. the first few google hits on this subject are some pretty useful articles imho, and strangely enough, you wont really find more on this.
my advice: do the p&i analysis for all 8 currencies yourself, by hand, using pen and paper. do this at least a few weeks until you actually understand what p&i does, and how you can use it. after this step you can start exploring the use of tools which can aid you in the analysis, but remember to always see such automated stuff in context and dont follow it blindly.

the thread the OP is referring to is this one: http://www.forexfactory.com/showthread.php?t=275541
Patience is key.
  • #7
  • Mar 20, 2011 2:02pm Mar 20, 2011 2:02pm
I found this http://fxtrade.oanda.com/analysis/currency-heatmap. There are 22 Currencies and all shows that the EUR has strengthened against others.

if I go bullish on the EUR, I'm with the trend
I am thinking right?
  • #8
  • Mar 20, 2011 10:37pm Mar 20, 2011 10:37pm
Quoting d0MiN077
I found this http://fxtrade.oanda.com/analysis/currency-heatmap. There are 22 Currencies and all shows that the EUR has strengthened against others.

if I go bullish on the EUR, I'm with the trend
I am thinking right?
Don't be surprised if long term, euro heads closer towards par again with the dollar.
Just my own longer term view. Most might disagree with me though.
  • #9
  • Edited Mar 24, 2011 5:54am Mar 23, 2011 10:24pm | Edited Mar 24, 2011 5:54am
Quoting enivid
If you think that EUR/USD is bullish, you can double check that by checking that the euro is bullish in other EUR pairs, such as EUR/JPY, EUR/GBP, EUR/CAD, etc., and then by checking that the US dollar is bearish in other pairs, such as USD/JPY, GBP/USD, USD/CAD, etc. That way you'll confirm your trend on the pair of choice by seeing the current trends on other pairs.
I had a read of the sites that came up on google, lots of the same article by one guy...it seemed pretty interesting.

There is something that doesn't quite sit right though...is including a pair that is closely correlated in the above list adding anything to the analysis?

For example, assuming you are looking at daily charts, EURUSD and EURGBP are very closely correlated, doesn't that invalidate the analysis for those two...or am I getting it completely wrong and that is the analysis? i.e. could you just go to mataf and check the correlation maps for the timeframe you are looking at and see how many are correlated and how many not? Then I guess the analysis would have to go deeper to determine if it was the other currency that was causing it to not correlate etc etc...hmmm, could end up in an analysis loop!


Cheers...

Just found this tool on mataf http://www.mataf.net/en/tools/06-01-trend
Hope for the best, but prepare for the worst
  • #10
  • Mar 24, 2011 7:23am Mar 24, 2011 7:23am
Quoting StudentX
I had a read of the sites that came up on google, lots of the same article by one guy...it seemed pretty interesting.

There is something that doesn't quite sit right though...is including a pair that is closely correlated in the above list adding anything to the analysis?

For example, assuming you are looking at daily charts, EURUSD and EURGBP are very closely correlated, doesn't that invalidate the analysis for those two...or am I getting it completely wrong and that is the analysis? i.e. could you just go to mataf and check the correlation...
There is no such thing as a permanent correlation in Forex. If two pairs are closely correlating to each other, that serves as a confirmation of some sort of trend that exists on one of the involved currencies.
  • #11
  • Last Post: Mar 24, 2011 8:01am Mar 24, 2011 8:01am
Quoting d0MiN077
I have been reading The Threat Long Term Pips. He talks about parallel and inverse analysis on Both Sides of pairs for confirmation of trend. how do you do it? I really need help =)

I take EURUSD as an example. I know that the eur is stronger than usd, but he talks about a number of couples that start with eur and usd, and check what is the strongest or weakest of them.

Can't say I have read much on it but my guess would be that if you where watching 2 USD markets, say EUR/USD and the GBP/USD, if EUR was going up and GBP was going down then the market to trade would be EUR/GBP bullish based on the balance of power being EUR.

If both EUR and GBP USD are bullish or bearish then you could again use the EUR/GBP direction to guage which is the stronger pair to trade.

Could be done with any pair provided there is a tradable coupling for each. I would say it is helpful for exotic couples such as EUR/GBP, EUR/AUD, GBP/NZD etc but spreads can be pretty deep on some of those, that is provided your broker is offering them.



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