Podcast:

Why I Trade With The Main Currency Strength and Weaknesses Each Day

In this video:

00:25     An important part of my daily trading routine

04:59     US Non-Farm Payrolls on the 1st Friday of the month

07:13     The Lot Size Calculator and how you can get your copy? I want to explain why I really enjoyed trading with the main currency strength and weaknesses each day. Let me share more details with you right now. 

 

Hi traders it’s Andrew Mitchem here from the Forex Trading Coach and today is Friday the 6th of June.An important part of my daily trading routine

I want to talk about currency strength and weakness. For me it’s something that’s quite important and it plays an important part of my daily trading routine and I like to share with you the reasons why because to me it’s quite a logical thing. If a particular currency is looking very strong and it’s looking strong against all other currencies and you then have another currency looking very weak and that’s looking particularly weak against all almost other currencies it seems logical to be trading in the direction of that pair when you put the two together. 

 

You take the strongest currency pair or your strongest currency and your weakest currency. Let’s say the strongest currency is the EUR and the weakest currency is the USD as an example put the two together it makes sense for today to trade as looking for buy trades on the EUR/USD. Now a few days time we might find that let’s say for example the same two you might find that next week the USD might be looking really strong and the EUR’s looking really weak. Again put the two together and it makes sense for that day and the upcoming day to be looking for short positions on the EUR/USD because your main dominant strength at that time or your main dominant direction for the EUR/USD to be falling so to me it makes logical sense. 

 

Well that’s fine but how do we use it and what advantages does it give us. Well  to me it helps keep me on the right side of the likely direction for that upcoming day so I go back to the example again let’s say the EUR is looking strong the USD is looking weak. For today I’m looking for predominantly buy-trades only on the EUR/USD and again what that does for me well it keeps me on the right side of course where I’m assuming or I’m looking for that currency to go. But what it also does is it helps me with confidence it helps me with not taking short positions on that pair for the day. Let’s say that the EUR/USD is going up really nicely and I haven’t taken any trades. I’ve either missed them or haven’t seen any it’s going up nicely but then it pulls back. Now a lot of people might be taking sell positions on that EUR/USD but I prefer to leave those setups. I might see a really good sell setup but because my main dominant strength for that day is for buy-trades I’m ignoring the sell setup. I’m letting the sell position or the retracement the sell off happen and I’m much preferring to then wait for bullish candles and buy setups in order to jump in as at a lower price at a better price and then ride the EUR/USD backup again after it had its retracement because don’t forget no currency just does that nothing goes up in a straight line or 45 degree angle line. 

 

Everything moves up and down. It moves up it pulls back and moves up and it has a bigger pull back sometimes but all together still moving up but it may move up and then retrace many, many times within that overall uptrend. The other scenario is let’s say I’m looking for buy trades on the EUR/USD and I don’t see any and the EUR/USD just sells, sells, sells just keeps falling day. What does it mean for me? Well most importantly it means I probably haven’t ended any buy-trades because I haven’t seen any.