Hi,
When you trade a pair of currencies, it is always helpful to compare the two part of it with other currencies within the other main pairs. E.g. if you see a technical reason to short the GBP/CHF, it puts more odds in you favour if you notice that at this time, the GBP is amongst the weakest currencies out there and the CHF is amongst the strongest.
I know that doing this comparison is quite boring and time consuming, but if you never tried it before, do it and see its result by yourself.
The way I do this analysis, if I would trade GBP/CHF, is that I look at the charts of 7 pairs of GBP and 7 pairs of CHF of the TF I'd like to trade with the 200 SMA. These are 13 pairs, not 14, because GBP/CHF belongs to both groups). Then I note down 1 for a currency if it resides on the strong side of the SMA, and -1 for a currency if it resides on the weak side of it.
E.g. EUR/GBP is currently above the 200 SMA, so I give 1 to EUR and -1 to GBP. If it was below, I'd give -1 to EUR and 1 to GBP. If it was GBP/EUR instead, it would have been currently below the 200 SMA, and I would have given 1 to EUR and -1 to GBP. Simple and common sense.
After that, I do the simple math. The current result is -7 for GBP and 7 for CHF, as per the attached sheet.
My request is, could anyone customise an indicator which can do this analysis and save us this work? The variable, as I imagine, would be
1.the 8 main currencies as on the sheet
2.the TF
3.the position against the 200 SMA, and the numbers, 1 & -1
Have a nice trading week coming ahead,
Ure
When you trade a pair of currencies, it is always helpful to compare the two part of it with other currencies within the other main pairs. E.g. if you see a technical reason to short the GBP/CHF, it puts more odds in you favour if you notice that at this time, the GBP is amongst the weakest currencies out there and the CHF is amongst the strongest.
I know that doing this comparison is quite boring and time consuming, but if you never tried it before, do it and see its result by yourself.
The way I do this analysis, if I would trade GBP/CHF, is that I look at the charts of 7 pairs of GBP and 7 pairs of CHF of the TF I'd like to trade with the 200 SMA. These are 13 pairs, not 14, because GBP/CHF belongs to both groups). Then I note down 1 for a currency if it resides on the strong side of the SMA, and -1 for a currency if it resides on the weak side of it.
E.g. EUR/GBP is currently above the 200 SMA, so I give 1 to EUR and -1 to GBP. If it was below, I'd give -1 to EUR and 1 to GBP. If it was GBP/EUR instead, it would have been currently below the 200 SMA, and I would have given 1 to EUR and -1 to GBP. Simple and common sense.
After that, I do the simple math. The current result is -7 for GBP and 7 for CHF, as per the attached sheet.
My request is, could anyone customise an indicator which can do this analysis and save us this work? The variable, as I imagine, would be
1.the 8 main currencies as on the sheet
2.the TF
3.the position against the 200 SMA, and the numbers, 1 & -1
Have a nice trading week coming ahead,
Ure
Attached File(s)
Strength Analysis.xls
26 KB
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514 downloads