The deviation between currency pairs shows strong momentum you can tap into. For instance, if a currency is strong and the other suddenly become weaker, that’s a signal for a trading opportunity. The rule of thumb is to buy strong currency and get rid of the weak. Therefore, before you take a trading position in any currency pair, determine the currency strength first. It also enables you to focus on currency pairs that are doing well in the market, those with a high break-out potential in comparison with other currency pairs. Your ability to determine a pair’s strength will go a long way in helping you trade with confidence. Rather, use the currency strength meter to identify a currency pair’s strength or weakness before deciding whether it is worthy of your investment or not.īetter still, determine the currency that may independently appreciate enabling you to determine the currency pair that may potentially have a positive price change.Īs a trader, understanding the relationship between individual currency and currency pairs is the key to a successful Forex trading experience.įor instance, if a GBP/USD pair is rising, that may not necessarily mean that the USD is weak, the GBP may be strong. Note that while you may be tempted to use the indicator to define a strong currency and start trading it, that’s not the best approach. How to use the Currency Strength indicator
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