Dollar rally: A tutorial on relative strength analysis
Updated
Hi traders. I'd like to share a few tips, that many traders ignore (I'd dare to say most).
If we compare the different dollar pair's performance over different time periods, we can glean important information, as to what cross pairs to trade, and reap some nice uncorrelated to oil, DXY and stocks returns. This is one of the advantages of including Forex in your trading portfolio and strategies.
In this chart, we take a look at a 5 week line chart of all dollar pairs. We can see that some started the week up, and went down, and only one closed up for the week (GBP). Out of all the pairs that fell, the ones that fell the most are the most interesting ones to short. We can look to short them against the dollar, to ride the main fundamental trend, kicked off by the Fed today - or we can look to trade cross pairs, taking advantage of the Pound's fundamental edge over the rest, as evidenced by the relative strength chart.
The idea is simple, go to the GBP cross pair charts, and find the most optimal technical setups to build your long GBP portfolio.
I'll leave that part to you, feel free to post your setups in the comments section, and I hope you find this technique useful.
There's more to this process, but I'll leave the extra bits of information to my trading students. This is already a great start to improve your Forex analysis and trading results, and stop wasting time looking at endless amounts of charts every day.
Cheers,
Ivan Labrie.
Ps: Check out this link, you can see Forex daily/weekly/monthly performance ranking of all currencies.
finviz.com/forex_performance.ashx?v=2
If we compare the different dollar pair's performance over different time periods, we can glean important information, as to what cross pairs to trade, and reap some nice uncorrelated to oil, DXY and stocks returns. This is one of the advantages of including Forex in your trading portfolio and strategies.
In this chart, we take a look at a 5 week line chart of all dollar pairs. We can see that some started the week up, and went down, and only one closed up for the week (GBP). Out of all the pairs that fell, the ones that fell the most are the most interesting ones to short. We can look to short them against the dollar, to ride the main fundamental trend, kicked off by the Fed today - or we can look to trade cross pairs, taking advantage of the Pound's fundamental edge over the rest, as evidenced by the relative strength chart.
The idea is simple, go to the GBP cross pair charts, and find the most optimal technical setups to build your long GBP portfolio.
I'll leave that part to you, feel free to post your setups in the comments section, and I hope you find this technique useful.
There's more to this process, but I'll leave the extra bits of information to my trading students. This is already a great start to improve your Forex analysis and trading results, and stop wasting time looking at endless amounts of charts every day.
Cheers,
Ivan Labrie.
Ps: Check out this link, you can see Forex daily/weekly/monthly performance ranking of all currencies.
finviz.com/forex_performance.ashx?v=2
Note
So, how did this idea result?All GBP crosses are up...
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ivanlabrie.substack.com/
ivanlabrie.substack.com/
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