thread: Strong - Weak Currency Analysis

Hey guys,

That is my first article in a long time so please bear in mind. We like winning trades no doubt, and we spend the majority of our time an'edge' that could tilt the scales in our favor.

When we exchange currencies pairs we buy one and sell the other, we exchange since we find something in our charts or because of a piece of news etc etc.. .something that may help give us a probability of winning is if we pit a currency using a weak currency and buy the currency when selling the currency. I felt this could be a good way to tip the scales in my favor, I discovered a number of indiors that attempted to show weakness and strength, and met a few people online who strove to judge a currency's strength relative to its own performance with a single currency, for example if we wanted to test the potency of the CHF in comparison with GBP we would look at its performance relative to the USD. This is beneficial to some extent however is time consuming and at times misleading, for reasons that are obvious.

I came across a post by Mr Richard Krivo and he uses a simplistic yet unique style to look for weakness and strength in currencies. The connection is as follows:

http://www.dailyfx.com/forex/eduion/...urrencies.html

I have slightly modified the process and find that it is extremely beneficial in helping me decide which currency pairs to trade. I would like to hear your thoughts on this,

Cheers
Abi

CindyI'm curious about your thoughts....would you head to give a different perspective here?

Appreciate it.

Not attempting to talk for cindyxxxx but he's a wise man.

He probably is speaking to the mean reverting tendency of currencies.

So If a big move is present odds are it will correct as opposed to some stocks that pick up steam.

I did a research from inception the lambda for any given movement is 2
(l^k)*(e^-l)/factorial(k)

will give you the probability density and cumulative purpose of K.

in plain english.... Each leg goes up a mean of 2 days before adjusting (the key word is AVERAGE) the further the movement is from the average that the greater probability of correcting

i.e if the euro has moved up 4 days (to be clear, has had EXACTLY 4 negative days (no favorable days in between)) then should encompass 94.73% of observations as to have 5.27% probability of humour....basically is bound to post a favorable day.
Again probability here. . .even .01% has .01% probability of occurring as an outlier.

I feel that can try short on UC and on EU, GU now.

The majority of the current pairs are narrow now.

Look closely at the long entrance stage of AU and AJ. Now, it may happen.

Entry Point Point of the earlier trade

Seem like direction has changed.

Entry Point = The Exit Point of the earlier Transaction

Sorry, Entry Point not equal to The Exit Point of the earlier Transaction the Majority of the time. It depends on which part of what chart.
H4, D1 chart okay, not on M15, M30 and H1 chart, the risk is too high.

U and J is going to be weak, accumulate all the pairs against them.

What a long waiting yesterday for your turning.