xysoom
Matrosen-Obergefreiter
Joined: 26 May 2020
Location: China
Online Status: Offline
Posts: 64
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| Posted: 14 July 2020 at 11:16 | IP Logged
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Why Relative Strength is Important in Forex?
As forex Traders we are always trying to get an edge in
our pursuit of increased profitability. We study the
charts and look for those setups that get us really
excited. We have our risk management in place, proper
position sizing and we have a target, that if met, will
generate a nice risk/reward ratio that over time will
make a generous amount of pips. We¡®re well on our way to
a profitable career as a Currency Trader. We¡¯re all
set¡.To get more news about
Wi
kiFX, you can visit wikifx news official website.
¡¡¡¡Yes, BUT, I would submit that you forgot one of the
most important things to consider before you even look at
a chart. The fact that you are pairs traders, implies
that you are long one currency and short another
currency, hence a currency ¡°pair¡±. Have you thought
about what pair you have picked and why it might not be
the BEST pair to trade£¿
¡¡¡¡Unless your analysis starts with relative strength
and weakness first, you might not be in the most
uncorrelated currencies to give you the biggest move
based on what you thought was a good setup on a chart.
 18/637253988314236600/ART637253988314236600_148285.jpg-
wikifx_articlepic">
¡¡¡¡When you are able to group the JPY pairs together and
identify the % change on all 7 pairings, it will give you
a snapshot of the strongest and weakness currencies at
the present time. You are then able to determine the pair
that has the best odds of providing the biggest move when
there is the catalyst to provide energy in the pair.
¡¡¡¡Because every trade is a relative value trade, you
can simply look at the % change and can quickly identify
the pair that will give you the potential biggest move
for a specific currency in play.
¡¡¡¡For example, if there is news on the USD, what
currency would you use to pair against the USD to give
you the biggest move if the news is bullish or bearish£¿
Truth is, it won¡®t be the same pair. If it¡¯s a bullish
USD, then one of the other 7 currencies will be the
weakest and if bearish, one will be the strongest.
¡¡¡¡By grouping the JPY pairs and identifying the most
uncorrelated currencies, you can take your trading to the
next level. Yes, you can be profitable without this
analysis, but I would submit that it will help move the
odds further in your favor and increase your risk/reward
ratio.
¡¡¡¡As Traders every time we can give ourselves a better
edge and move the odds in our favor, thats a winning
strategy.
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Topic: Why Relative Strength is Important in For
