October 14, 2015 Daily Analysis

10/14 Analysis: Extreme Momentum

Extreme Momentum

Today, I want to show you how to take advantage when there is extreme momentum on 1 specific currency. At the London open, the NZD (purple line) is clearly the strongest currency (actually the only strong currency) with a steep line to the far right indicating huge momentum in the market going on right now.


You could pair this with virtually any weak currency. The most attractive is the USD (blue line) because it’s starting to form a steep line down to the far right.

Without a lot of momentum right now on the USD, I’d place a pending order 10 pips away from the current price.


You can see why using pending orders with this breakout strategy is important because the NZD does pull back temporarily but your order 10 pips above would not have been triggered until the trend continues and the NZD moves back up.

101415 LondonTrade1

From the point where your order would have been triggered, the pair went straight up 45 pips.

When you watch the entire video analysis below, I’ll show you 2 more profitable trades using the same info on the indicator:

[00:00 – 06:25]

[slide]              [1st view: indicator with lilac [NZD] strong, skyrocketing to strength]

                        Hello, I’m James Edward from CompleteCurrencyTrader.com, here with another Currency Strength Analysis training video and, today, we have a fantastic example of how easy it is to trade when we have extreme momentum in the Market. So, this is what the indicator looked like at the London Market Open earlier today and you can see that this purple New Zealand Dollar (NZD) line is standing out, significantly separate from all the other currencies. So there’s clearly a very big move on the (lilac) New Zealand Dollar (NZD). In fact, this is just prior to the Market Open, obviously, because [points uppermost point, far right] this is the exact Open, to the second, over here, on the right-hand side. So, that is a currency that is significantly stronger than anything else in the Market and has clearly moved an awful lot in the five minutes just leading up to the Market Open.

When you have one currency that is moving with such extreme momentum, you can, more or less, pair it against anything in the Market and the strength of this one currency, [points along lilac–which he’s calling purple–rise] by itself, will carry the rest of the Market if any pair that that is in is going to move significantly. And that’s exactly what has happened today. If I just move this forward [slides view right] a little bit, you can see–

[slide]              [2nd view: lilac peaks and drops, blue / pink up, green / yel / red down]

(continues) … initially, after the (lilac) New Zealand Dollar (NZD) pulled back. So, if I just push it back a little bit again to the start–

[slide]              [previous 1st view: lilac [NZD] strong, skyrocketing to strength]

(continues) … Right now you might be thinking to do the break-out trade, using the pending order, where, if you remember from previous videos, I say you should place a pending order 10 pips away from the Market Open price. So, in this case, you’d be placing a buy on the (lilac) New Zealand Dollar (NZD) at 10 pips from wherever it opens. And, after the Market Open, if I move it forward,–

[slide]              [previous 2nd view: lilac peaks and drops, blue / pink up, green / yel / red down]

(continues) … you can see that the (lilac) New Zealand Dollar (NZD) actually pulled back, in which case, that pending order would not have been triggered because the price didn’t go on another 10 pips to trigger that price or to trigger that pending order. away from the trade. So, initially, you wouldn’t actually be in the Market. However, [slides indicator view right] a little further on–

[slide]              [3rd view: lilac back up, blue / pink higher, yel / green / red lower]

(continues) … and this is just nine minutes after the Open. You can see that the (lilac) New Zealand Dollar (NZD) starting to [points far rt] move up, steeply, yet again. And, if you look on the weak side, you have the (red) British Pound (GBP) down here and, more notably, I suppose, is the (purple) U. S. Dollar (USD). Those two currencies are moving down away.

That could be the point that you decide to get in. If that’s not obvious enough for you, I can push this forward [does]

[slide]              [4th view: lilac near top of chart, blue drops, green / red down to weakness]

(continues) … up to the 17-minute point and you can see that the (lilac) New Zealand Dollar (NZD) has moved even further up to strength and, again, down here to the weak side is the (red) British Pound (GBP), (green) Canadian Dollar (CAD) moving down. And, I’ll just move it again–

[slide]              [5th view: lilac even stronger, green diving]

(continues) … to this point. This is, again, 23 minutes after the Market has opened and you can see the (lilac) NZD against the (green) Canadian Dollar (CAD) and–

[slide]              [6th view: lilac alone top right, green / red / purple / yellow to weakness]

(continues) … at the 24-minute point, you have, probably, the best pattern of the morning so far, and that is the (lilac) New Zealand Dollar (NZD) moving even more steeply up to strength and the (purple) U. S. Dollar (USD) is the most attractive weak currency. Now, this is 24 minutes after the Market, but I’ve shown you moments there– [slides left, back to 3rd view]

[slide]              [previous 3rd view: lilac back up, blue / pink higher, yel / green / red lower]

(continues) … right from the start where we could identify the (purple) U. S. Dollar (USD) moving down–and the (red) British Pound (GBP) and the (green) Canadian Dollar (CAD). And, at several points–[fast fwds back to 6th view, pausing just long enough to note:] this is the nine-minute point, this is the 17-minute point; this is 23 minutes and 24 minutes. There are multiple signals there, multiple times throughout that 24-minute period where you could’ve got[ten] into a trade with that (lilac) New Zealand Dollar (NZD) against, more or less, any of the currenc[ies] in the Market (apart from, perhaps, the (orange) Australian Dollar (AUD).

Now, if I go over to those three charts that I mentioned there: the most significant ones are the (green) Canadian Dollar (CAD), the (purple) U. S. Dollar (USD) and the (red) British Pound (GBP).

[slide]              [B&W vertical line NZDCAD.MS]

And the first one I’ll show you is the (lilac) New Zealand Dollar (NZD) against the (green) Canadian Dollar (CAD). [points 1st longest bar] This is the move that has happened just prior to the London Market Open and [points top 1st bar right] this candle, here, is the London Market Open. So, you can see, initially, where the (lilac) New Zealand Dollar (NZD) pulled [2nd bar rt] back. But, from the Open, [creates cross bar at top 1st bar right, diag line pulled up 7 bars] the price on NZD:CAD has gone up almost 50 pips, so if you’d entered at any point from the Open, using either a 10-pip pending order or using any of these bursts of momentum–and this is the last signal–so, at the 24-minute point [5th bar rt] so, at the top of this price bar, here [creates new cross bar top 5th bar rt] so that is the latest pattern that you’d have got[ten] into–and, even from there, the price has gone up over 30 pips and you would’ve been easily able to take your 20-pip profit from that one.

So, that’s NZD:CAD.

[slide]              [B&W vertical line NZDUSD.MS]

The (lilac) NZD:(purple) U. S. Dollar (USD)–if I bring that one in, this is the move that happened just prior to the London Market Open. [points 1st bar rt of 1st longer candle] The small pull back, as London opened [creates cross bar, diag up to top 7 candles rt] and from the opened price, the price went back up. It’s gone 45 pips into profit and, again, you’d have entered around about here [points 3 bars left] on this burst of momentum. And, that has given you, at the 24-minute point, a move [creates cross bar top that 3rd bar left, diag line top 3 bars right] of over 34 pips so, again, another easy trade to catch a 20-pip break out.

And, finally, I will–

[slide]              [B&W vertical line GBPNZD.MS]

(continues) … show you the Pound against the NZD, which was the other decent currency that I showed you.

This is the move [points 1st long candle] that I showed you just prior to the London opening. This [points 1st bar right] is the pull back that happened at the Open, within the first five to ten minutes. But, then, as the price pushed back down again, [creates cross bar 2nd bar right, draws diag line down to lowest pt] it’s gone 114 pips, in total, down to the lowest point.

This [2nd longest candle] would’ve been the burst of momentum that you first saw, but you could’ve got[ten] in really late on this candle (here) [2nd bar to longest bar] but, even from then, the price has gone down 50 pips. So, basically, any–

[slide]              [6th view: lilac alone top right, green / red / purple / yellow to weakness]

(continues) … currency that you’d paired against the (lilac) New Zealand Dollar (NZD) today [points to lilac line] would’ve resulted in a profit break-out trade and that is showing you of trade at extreme momentum in the Market. It doesn’t happen every day; it’d be lovely if it did, but when you see [follows lilac line to rt] a line like this, where one currency really stands out in isolation on its own, the amount of momentum and the orders that are going into that single currency is enough to, more or less, carry any other currency against it.

So, you could have, this morning, traded NZD against just about anything, right the way–

[slide]              [1st view: indicator with lilac [NZD] strong, skyrocketing to strength]

(continues)… from back here at the Market Open. If you’d put a pending order on the (lilac) New Zealand Dollar (NZD) against any of these [points generally weak lines, far right] weak currencies, you would have walked away with a 20-pip profit.



You can see that our Currency Strength Indicator is an effective tool for picking out the highest probability, lowest risk trade set ups while avoiding market conditions that aren’t favorable. If you keep using this tool every day along with our daily Forex analysis, you will increase your win rate and be on your way to becoming a profitable trader long term.

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James Edward
James Edward has been a successful Forex hedge fund manager & educator for over a decade. He founded Complete Currency Trader, a London based firm that has consistently trained individuals to become professional and profitable traders long term using the individual currency strength analysis methodology. CCT is an elite Forex educational firm and has a reputation second to none with over 90 positive reviews and an overall 4.538 out of 5 rating on the third party verification site Forex Peace Army. James’s affable personality, expert knowledge, notoriety for getting results, and steadfast dedication to his clients, has secured his position as one of the most trustworthy, liked, and in demand authorities in the industry.