Cross Currency Analysis

[forexfx4x 10]

I will be covering my analysis approach in this thread. Basically I look to trade strong versus weak currencies. Price action is used to execute trades. Lets start with the recent currency strength chart and take it from there:

 

 

We can see that the AUD and NZD are the strongest currencies and the CHF and EUR the weakest when referencing these charts. If you take a look back over recent trading you will see the NZD/USD broke a bearish head and shoulders. Knowing that it is one of the strongest currencies had me fading this bearish breakout. The AUD/USD gave a bullish engulfing candle last week, this was inline with the currency strength chart and therefore a buy.

 

Sometimes, of course, the trend will reverse after entering a trade but trading strong versus weak is a trend trading approach and can be very effective if executed correctly.

 

More posts to follow soon with charts.

[Obsidian 10]

Welcome to the TL community and especially to the forex section

[henryduncan12 10]

Hi forexfx4x, I am agree with you for the following "trading strong versus weak is a trend trading approach and can be very effective if executed correctly." Even though experienced traders execute it properly.