7/1 Analysis: Knowing which pair to trade
We are looking again at the importance of momentum in the market. Right now there is nothing that meets our criteria. We have strong and weak currencies but none of them are continuing to get stronger or weaker. The market is flat.
Under these conditions, I’d be reluctant to even place pending orders.
However, if we fast forward only about 20 seconds into the session this is what the indicator looked like:
Now this is where having market knowledge like we teach in some of the advanced lessons included in our home study course is vital.
The CAD is the strongest currency up top (green line) and the CHF is clearly the weakest down below and getting weaker (turquoise line).
But, the CAD/CHF doesn’t have a wide daily trading range yet the spread is one of the widest. This makes it very difficult to profit from this pair. So I would ignore the CAD/CHF and look for better opportunities.
I’d first look to trade the following:
- USD/CHF BUY
From the point that we saw the indicator change showing current momentum in the market, this pair went straight up 48 pips.
When you watch the entire video analysis, you will see how early we can identify these moves well before the amateur crowd. You will also see another profitable opportunity on the CHF/JPY from today’s London session.
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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