USD Index: Let's focus on what drives the markets!

Inevitably, for any FX trader sticking to the major pairs the USD should be guiding your decision making process as a trader.

I have posted 2 charts. The one on the top is the USD follar index Futures contract. Under that is the spot USD index using a template from the VSA system (google sigtrader for the metatrader platform that gives you live currency indexes for all major countries).

On the this chart, notice the red bar spike, this was just before the home sales release this morning. It gave me plenty of time to see that it was bearish and I took a long in GU that was very profitable.


Please post your charts of the dollar index and give give us an idea of what it's telling you.

75% of all trades in FX use the dollar somehow, isn't it time we focus on it above any single pair? All systems are welcome, this is an exercise in collaboration and free thought!

check my thread. By careful with the litef... indices though. There are much better calculations available.

Thanks unknown, skimmed through and this is great stuff on finding the strongest/weakest pairs right up the alley of what I hope everyone can learn more about. Everyone check out Unknown's thread here ->

http://www.forexfactory.com/showthread.php?t=334165


For anyone with thread(s) along these lines, please do share any relevant links.

Thanks. Haven't continued so far. People are not very interested. Most simply don't understand it / wouldn't be able to digest the information in realtime on their charts anyways so ...

Gambling on indicators is easier of course.

Btw as a little suggestion: Have you tried reading actual volumes from major exchanges? This is much more accurate + makes more sense than metatrader volumes. I experimented a while ago with reading tick bid/ask volumes from 3 major exchanges and based trades on usd volume flipping over. Works quite nice.

This is true. Well until now I have used this indicator to get an idea of how each compares to one another, of course unless you spend hours staring at it you don't get a good idea of how long something has been strong, but nevertheless I find it accurate as a heatmap relative strength guide.

Yeah I used to keep a live S&P 500 feed when I day traded stocks and just haven't gotten around to signing with another service yet since trading fx. There are some free futures demo's you can get right? I think Infinity offers it a free demo.