FxTaTrader


Forex Technical Analysis based on experience and research.

Sunday, November 19, 2017

Forex Metrics and Chart Week 47 / 2017

 The Top 10 of the Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: the EUR(3X) with the JPY(3X) followed by the GBP(2X). The weaker currencies are the NZD(5X) followed by the AUD(3X) and the CAD(2X).
By diversifying a nice combination can be traded in the coming week like e.g.:
  • EUR/NZD with the CAD/JPY
  • NZD/JPY with the GBP/AUD


______________________________________

Ranking and Rating list

Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every week the Forex ranking rating list will be prepared for the weekend. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.





______________________________________

For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 12 November 2017 and is provided here for reference purposes:
Strong: EUR and CAD. The preferred range is from 7 to 8.
Neutral: USD, AUD and GBP. The preferred range is 4 to 6.
Weak: JPY, CHF and NZD. The preferred range is from 1 to 3.

When comparing the 13 weeks Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand, these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy, these pairs are not traded because these would be trades in lower Time Frames than the 4 Hour chart. Nevertheless, they may offer good chances for the short term trader.



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Currency Score Chart

The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is my analysis on the 8 major currencies based on the technical analysis charts using the MACD and Ichimoku indicator on 4 Time Frames: the monthly, weekly, daily and 4 hours. The result of the technical analysis is the screenshot here below.





When comparing the 13 weeks Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail.



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Chart of the Week






The Chart for this week is the NZD/USD 4 Hour chart.
Price is clearly in a downtrend and made a low lately at 0.6780. It is now consolidating above that level has currently a strong pullback nearing the Tenkan-Sen.
  1. A nice sell opportunity would be around the Nr. 1 yellow dotted line and the Kijun-Sen. The yellow dotted line seems to be an important Support/Resistance level.
    • The PSAR turned negative but may change to positive. It is however in favor of Short positions and as long as the PSAR in the Daily chart remains negative this set up remains valid.
    • By preference, the candlesticks should show a good pattern that confirms the entry. This could be e.g. one of the reversal Candlesticks patterns or a continuation pattern. Check e.g. the following links for more information: Bulkowski's Top 10 Reversal Candlesticks , Wikipedia Candlestick pattern or Investopedia Candlestick .
  2. The target should be above the Nr. 2 yellow dotted line where the latest low was made. This may be or become a support level and closing above that level is for that reason a good target.
  3. In case of a stronger pullback with price going far above the Nr. 1 yellow dotted support line with the MACD not recovering the set-up is no more valid. A stop-loss should be placed above the Nr. 3 yellow dotted support line. Having a Stop Loss above an important recent Top seems a good idea. These are levels where Support or Resistance may reside too. In this case, it would be above the high of 17 November at 0,6883.
  4. The MACD should show strength in the MACD minus Signal, these are the Blue and Red bars. Either the red bars should become larger or the blue bars smaller. The MACD should stay below the zero line.
  • This is a pair that fits best in Point 1 of the Comparison Table Guide. For more information read my other Weekly article called the "Forex Strength and Comparison".
  • The USD is a Neutral currency and the NZD is a Weak currency. The Currency Score Difference is 3.
The set-up mentioned remains valid as long as the pair remains in the Top 10 of the coming Weekly Ranking and Rating lists and continues to comply with the point of the Comparison Table Guide mentioned above.


______________________________________

Besides this article, I also use the Forex "Strength and Comparison" which is also available once a week on my blog. In that article, we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Weekly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article, then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

______________________________________

DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone. The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Forex Strength and Comparison Week 47 / 2017

In the Currency Strength table, the EUR was the strongest currency while the NZD was the weakest. There were some significant changes last week with the JPY gaining 3 points and the CHF gaining 2 points and the CAD losing 3 points. The other currencies remained around the same level of last week with a maximum change in the strength of just 1 point.

The JPY showed a good performance during the whole week and a very strong performance at the end of the week. The EUR and GBP 
showed a steady and strong performance during the whole week and to a lesser extent, the USD and CHF did too.The EUR is a Strong currency and fits exactly with the current performance in the Classification and Score.
The GBP and USD are Neutral currencies and do not fit exactly with the current performance in the Classification and Score. However, being a Neutral currency it may offer some good opportunities against the Weak currencies.

The NZD and AUD 
showed a poor performance during the whole week and a very weak performance at the end of the week. The CAD showed a weak performance during the whole week.The NZD is a Weak currency and fits exactly with the current performance in the Classification and Score.
The AUD is a Neutral currency and does not fit exactly with the current performance in the Classification and Score. However, being Neutral currencies it may offer some good opportunities against the Strong currencies.

Based on the development as described above it seems that going long with the EUR, GBP or USD against the NZD or AUD may offer good opportunities. If this is being confirmed by the analysis in both of my Weekly articles and the charts are looking in the right direction, these combinations may offer good opportunities.




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 13 Weeks Currency Score Strength

The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. This data and the "13 weeks Currency Classification" are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single week, we perform several checks to avoid this.
  1. First of all the strength over a period of the last 13 weeks is considered. See each row for more information.
  2. Next, the 13 weeks average is considered, see the last row called "Avg. 13 wks."
  3. The number of weeks that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.



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Average 13 wks. Score

When looking at the Average 13 wks. Score we can see the currencies grouped together according to their classification.
There may be some doubt and in that case it could be a currency that will change its classification in the coming weeks. There are no such currencies at the moment.
  • Strong - We can see that the EUR and CAD are clearly grouped together as Strong currencies around an Average 13 wks. Score of 6 to 7
    • The EUR is the strongest currency and continues to deliver high Scores.
  • Neutral - The USD, GBP and AUD are grouped together around an Average 13 wks. Score of 4 to 5.
  • Weak - The JPY, CHF and NZD are grouped together around an Average 13 wks. Score of 3.



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Classification review

This week we take a look at the Weak currencies. We can see that the JPY is making higher tops and bottoms during the last period after the bottom in September. Although it is still too far with the classification from the Neutral currencies it may become one if it remains performing like last week.
The CHF is a currency that can be found often in the middle of the range. It is at the moment the strongest currency among the Weak currencies and for that reason the most near to the Neutral currencies. It had a Score of 5 last week which is a Score in the middle of the range. Also, this currency may become Neutral if it keeps showing these Scores.
The NZD was the weakest currency of last week and is the Weakest currency 
according to the Average 13 wks. calculation. There is no sign of recovery there.
Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.



For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 12 November 2017 and is provided here for reference purposes:
Strong: EUR and CAD. The preferred range is from 7 to 8.
Neutral: USD, AUD and GBP. The preferred range is 4 to 6.
Weak: JPY, CHF and NZD. The preferred range is from 1 to 3.


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Currency Score Comparison

 "Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information about the currency Score of this week, you can read the article "Forex Ranking, Rating and Score" which is published every week together with this article.
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list". Only the strength of each currency against the counterparts is analyzed by using the Technical analysis charts of the 4 Time Frames that are also used for the "Ranking and Rating List".
The information from the Comparison Table is the source for calculating the "Ranking and Rating List" where this list additionally uses the volatility and statistics for creating the best and worst performer in the list from number 1 to 28.

The information is published once a week and be aware that rates change during this period. The mentioned scores also change and different opportunities may show up. There are many ways to follow the rate changes. This can be done e.g. by looking at the charts and checking e.g. the Ichimoku and/or MACD in the Weekly and Daily chart. There are also many tools, apps and websites where the movement of trading rates of currencies is shown in different automated ways. This may be in pips or through percentage differences or by comparing the values of indicators like the RSI, Moving Averages, MACD, Ichimoku etc. On my blog a Heatmap is available that can be of use also.








"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination.
The comparison table provides a way to compare currencies from a longer-term perspective of 13 weeks and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are.


Comparison table Guide
  1. First of all better-classified currencies in combination with weaker-classified currencies can always be traded and vice versa. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  2. Second, only equally classified currencies are approved when there is a positive Currency Score difference. Also here, the trend has to be confirmed again.
    The difference between point 2 and 1 is that the long trend is not clear with 2 equally qualified currencies because that pair is in a sideways market. For that reason, the Currency Score difference cannot have a negative difference. A positive difference confirms the momentum for a short revival.
  3. Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least +4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
    The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  4. By preference, each currency should be selected for a trade with a score difference as far apart from each other as possible in the range from 1 to 8. However, these opportunities are rare and for that reason point 1 offers flexibility and is the best choice to trade, point 2 is the second best and point 3 is the third best choice.
  5. The classification of the currencies in question may change in the longer term. Even though currencies may be in the same category a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.


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Putting the pieces together

Based on the last "13 Weeks currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
EUR and GBP.

These are Strong or Neutral currencies from a longer term perspective when looking at the last "13 Weeks currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
AUD and NZD.
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example now is/are e.g. the:.
JPY and CAD.


______________________________________

Besides this article, I also use the Forex "Ranking, Rating and Score" which is also available once a week on my blog. In the article "Ranking, Rating and Score" we look in more detail at the absolute position of the currencies and pairs.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

______________________________________

DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone. The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Sunday, November 12, 2017

Forex Strength and Comparison Week 46 / 2017

In the Currency Strength table, the CAD was the strongest currency while the AUD was the weakest. There were some significant changes last week with the GBP and CHF gaining 2 points and the USD losing 3 points. The other currencies remained around the same level of last week with a maximum change in the strength of just 1 point.The CAD showed a good performance during the whole week and a very strong performance at the end of the week. The EUR and GBP showed a steady and strong performance during the whole week.The EUR and CAD are Strong currencies and fit exactly with the current performance in the Classification and Score.
The GBP is a Neutral currency and does not fit exactly with the current performance in the Classification and Score. However, being a Neutral currency it may offer some good opportunities against the Weak currencies.

The USD showed a very weak performance at the end of the week. The AUD showed a weak performance during the whole week.
The AUD and USD are Neutral currencies and do not fit exactly with the current performance in the Classification and Score. However, being Neutral currencies it may offer some good opportunities against the Strong currencies.

Based on the development as described above it seems that going long with the EUR or CAD against the AUD or USD may offer good opportunities. If this is being confirmed by the analysis in both of my Weekly articles and the charts are looking in the right direction, these combinations may offer good opportunities.




______________________________________

 13 Weeks Currency Score Strength

The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. This data and the "13 weeks Currency Classification" are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single week, we perform several checks to avoid this.
  1. First of all the strength over a period of the last 13 weeks is considered. See each row for more information.
  2. Next, the 13 weeks average is considered, see the last row called "Avg. 13 wks."
  3. The number of weeks that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.



_____________________________________

Average 13 wks. Score

When looking at the Average 13 wks. Score we can see the currencies grouped together according to their classification.
There may be some doubt and in that case it could be a currency that will change its classification in the coming weeks. There are no such currencies at the moment.
  • Strong - We can see that the EUR and CAD are clearly grouped together as Strong currencies around an Average 13 wks. Score of 6 to 7
    • The EUR is the strongest currency and continues to deliver high Scores.
  • Neutral - The USD, GBP and AUD are grouped together around an Average 13 wks. Score of 4 to 5.
  • Weak - The JPY, CHF and NZD are grouped together around an Average 13 wks. Score of 3.


_____________________________________

Classification review

This week we take a look at the Classification changes. Based on the performance from September and before the top on October 15 seemed more like a correction coming from a low Score of 2 on October 1. The currency remained strong because it recovered fast.
However, after that top it made a dive for the second time and to the lowest Score of 1. With the current low performance, it has become a Neutral currency coming from being a Strong currency.

The CHF is a currency that remains most of the time in the middle of the range. Last week it recovered and gained 2 points compared to the previous week. However, the Classification calculates with the last 13 weeks and based on that this currency has become a Weak currency coming from being Neutral.Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.




For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 12 November 2017 and is provided here for reference purposes:
Strong: EUR and CAD. The preferred range is from 7 to 8.
Neutral: USD, AUD and GBP. The preferred range is 4 to 6.
Weak: JPY, CHF and NZD. The preferred range is from 1 to 3.


_____________________________________

Currency Score Comparison

 "Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information about the currency Score of this week, you can read the article "Forex Ranking, Rating and Score" which is published every week together with this article.
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list". Only the strength of each currency against the counterparts is analyzed by using the Technical analysis charts of the 4 Time Frames that are also used for the "Ranking and Rating List".
The information from the Comparison Table is the source for calculating the "Ranking and Rating List" where this list additionally uses the volatility and statistics for creating the best and worst performer in the list from number 1 to 28.

The information is published once a week and be aware that rates change during this period. The mentioned scores also change and different opportunities may show up. There are many ways to follow the rate changes. This can be done e.g. by looking at the charts and checking e.g. the Ichimoku and/or MACD in the Weekly and Daily chart. There are also many tools, apps and websites where the movement of trading rates of currencies is shown in different automated ways. This may be in pips or through percentage differences or by comparing the values of indicators like the RSI, Moving Averages, MACD, Ichimoku etc. On my blog a Heatmap is available that can be of use also.








"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination.
The comparison table provides a way to compare currencies from a longer-term perspective of 13 weeks and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are.


Comparison table Guide
  1. First of all better-classified currencies in combination with weaker-classified currencies can always be traded and vice versa. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  2. Second, only equally classified currencies are approved when there is a positive Currency Score difference. Also here, the trend has to be confirmed again.
    The difference between point 2 and 1 is that the long trend is not clear with 2 equally qualified currencies because that pair is in a sideways market. For that reason, the Currency Score difference cannot have a negative difference. A positive difference confirms the momentum for a short revival.
  3. Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least +4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
    The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  4. By preference, each currency should be selected for a trade with a score difference as far apart from each other as possible in the range from 1 to 8. However, these opportunities are rare and for that reason point 1 offers flexibility and is the best choice to trade, point 2 is the second best and point 3 is the third best choice.
  5. The classification of the currencies in question may change in the longer term. Even though currencies may be in the same category a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.


______________________________________

Putting the pieces together

Based on the last "13 Weeks currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
CAD, EUR and GBP.

These are Strong or Neutral currencies from a longer term perspective when looking at the last "13 Weeks currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
AUD, NZD and CHF.
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example now is/are e.g. the:.
AUD.


______________________________________

Besides this article, I also use the Forex "Ranking, Rating and Score" which is also available once a week on my blog. In the article "Ranking, Rating and Score" we look in more detail at the absolute position of the currencies and pairs.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

______________________________________

DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone. The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Forex Metrics and Chart Week 46 / 2017

 The Top 10 of the Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: the EUR(3X) with the CAD(3X) and GBP(3X). The weaker currencies are the AUD(4X) followed by the CHF(3X) with the NZD(3X).
By diversifying a nice combination can be traded in the coming week like e.g.:
  • EUR/AUD with the NZD/CAD
  • GBP/AUD with the EUR/CHF


______________________________________

Ranking and Rating list

Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every week the Forex ranking rating list will be prepared for the weekend. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.





______________________________________

For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 12 November 2017 and is provided here for reference purposes:
Strong: EUR and CAD. The preferred range is from 7 to 8.
Neutral: USD, AUD and GBP. The preferred range is 4 to 6.
Weak: JPY, CHF and NZD. The preferred range is from 1 to 3.

When comparing the 13 weeks Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand, these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy, these pairs are not traded because these would be trades in lower Time Frames than the 4 Hour chart. Nevertheless, they may offer good chances for the short term trader.

______________________________________

Currency Score Chart

The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is my analysis on the 8 major currencies based on the technical analysis charts using the MACD and Ichimoku indicator on 4 Time Frames: the monthly, weekly, daily and 4 hours. The result of the technical analysis is the screenshot here below.




When comparing the 13 weeks Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail.


______________________________________

Chart of the Week

The Chart for this week is the EUR/AUD 8 Hour chart.
Price is clearly in an uptrend and made a high lately at 1.5392. It is now consolidating below that level and had a strong pullback towards the Ichimoku cloud.
  1. A nice buy opportunity would be around the Nr. 1 yellow dotted line and the Tenkan-Sen. Price is already gaining momentum and a pullback towards the Kijun-Sen is not expected. The Tenkan-Sen may continue to go higher and cross the Kijun-Sen. The yellow dotted line seems to be an important Support/Resistance level.
    • The PSAR is positive and it should remain this way because the Daily PSAR has turned negative. Based on the current level of the PSAR in the 8 hour chart there is enough time for the pair to rise without getting near to the PSAR.  
    • By preference, the candlesticks should show a good pattern that confirms the entry. This could be e.g. one of the reversal Candlesticks patterns or a continuation pattern. Check e.g. the following links for more information:  Bulkowski's Top 10 Reversal Candlesticks , Wikipedia Candlestick pattern or Investopedia Candlestick
  2. The target should be below the Nr. 2 yellow dotted line where the latest high was made. This may be or become a resistance level and closing below that level is for that reason a good target.
  3. In case of a stronger pullback with price going far below the Nr. 1 yellow dotted support line with the MACD not recovering the set-up is no more valid. A stop-loss should be placed below the Nr. 3 yellow dotted support line. Having a Stop Loss below an important recent Top or Bottom seems a good idea. These are levels where Support or Resistance may reside too. In this case, it would be below the low of 7 November at 1,5080.
  4. The MACD is already rising and shows strength in the MACD minus Signal, these are the Blue and Red bars. Either the red bars should become smaller or the blue bars larger. The MACD should stay above the zero line.
  • This is a pair that fits best in Point 1 of the Comparison Table Guide. For more information read my other Weekly article called the "Forex Strength and Comparison".
  • The EUR is a Strong currency and the AUD is a Neutral currency. The Currency Score Difference is 6.
The set-up mentioned remains valid as long as the pair remains in the Top 10 of the coming Weekly Ranking and Rating lists and continues to comply with the point of the Comparison Table Guide mentioned above.


______________________________________

Besides this article, I also use the Forex "Strength and Comparison" which is also available once a week on my blog. In that article, we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Weekly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article, then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

______________________________________

DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone. The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Tuesday, November 7, 2017

Forex Strength And Comparison November 2017

In the Currency Strength table, the EUR was the strongest currency again while the NZD was the weakest. There were some significant changes last month with the JPY gaining 3 points, the USD 2 points and the CHF losing 2 points. The other currencies remained around the same level of last month with a maximum change in the strength of just 1 point.

The USD showed a very strong performance at the end of the month. The EUR showed a steady and strong performance during the whole month and to a lesser extent, the CAD did too.

These currencies fit exactly with the current performance in the Classification and Score that they have.

The AUD showed a very weak performance at the end of the month. The NZD 
showed a very weak performance during the whole month and to a lesser extent, the CHF did too.

The CHF fits exactly with the current performance in the Classification and Score that it has.
The AUD and NZD are Neutral currency and do not fit exactly with the current performance in the Classification and Score that they have. However, being Neutral currencies it may offer some good opportunities against the Strong currencies.

Based on the development at the end of last month and the steady performance of the currencies during the last month as described above it seems that going long with the USD, EUR or CAD against the CHF, AUD and NZD may offer good opportunities. If this is being confirmed by the analysis in both of my Monthly articles and the charts are looking in the right direction, these combinations may offer good opportunities.




______________________________________

 12 Months Currency Score Strength

The 12 Months Currency Strength and the 12 Months Average are provided here below. This data and the "12 months Currency Classification" are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single month, we perform several checks to avoid this.

  1. First of all the strength over a period of the last 12 months is considered. See each row for more information.
  2. Next, the 12 months average is considered, see the last row called "Avg. 12 M."
  3. The number of months that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.




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Average 12 M. Score

When looking at the Average 12 M.. Score we can see the currencies grouped together according to their classification.

  • Strong - We can see that the USD, EUR and the CAD are clearly grouped together as Strong currencies around an Average 12 M. Score of 5 to 6. 
    • The EUR is the strongest currency and continues to deliver high Scores while the AUD, being a Strong currency, is showing a bit of weakness in the last 2 months.
  • Neutral - The AUD and NZD are grouped together around an Average 13 wks. Score of 4,7.
    • These currencies are very close to the Strong currencies and this means that they can easily change Classification in the coming period. 
  • Weak - The GBP, JPY and CHF are grouped together around an Average 13 wks. Score of 3 to 4.
    • The GBP continues to show a lot of strength a score of 5 but lost a lot of strength in the previous months. It remains the weakest currency of all based on the Average 12 M. Score.


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Classification review

This month we take a look at the Strong currencies. There were a lot of Classification changes and the Strong currencies for this month are the USD, EUR and CAD. As can be seen, the EUR came from the bottom a few months ago and is delivering very high Scores in the last 6 months. The USD and CAD made a dip around June of this year and both recovered.
Below you can see the Monthly Currency Score Chart with the 24 months' data as a reference.



For analyzing the best pairs to trade looking from a longer-term perspective the last 12 months Currency Classification can be used in support.
There were a lot of classification changes last month. Here below you can see the old classification followed by the most current one:

Old Classification

Strong: USD, NZD, AUD. The preferred range is from 6 to 8.
Neutral: EUR, CAD, CHF. The preferred range is from 3 to 5.
Weak: JPY, GBP. The preferred range is 1 to 2.

New Classification
This classification was updated on 6 November 2017 and is provided here for reference purposes: 
Strong: USD, EUR, CAD. The preferred range is from 6 to 8.
Neutral: AUD, NZD. The preferred range is from 4 to 5.
Weak: JPY, GBP, CHF. The preferred range is 1 to 3.



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Currency Score Comparison

 "Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information about the currency Score of this month, you can read the article "Forex Ranking, Rating and Score" which is published every month together with this article.
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list". Only the strength of each currency against the counterparts is analyzed by using the Technical analysis charts of the 4 Time Frames that are also used for the "Ranking and Rating List".
The information from the Comparison Table is the source for calculating the "Ranking and Rating List" where this list additionally uses the volatility and statistics for creating the best and worst performer in the list from number 1 to 28.

The information is published once a month and be aware that rates change during this period. The mentioned scores also change and different opportunities may show up. There are many ways to follow the rate changes. This can be done e.g. by looking at the charts and checking e.g. the Ichimoku and/or MACD in the Monthly and Weekly chart. There are also many tools, apps and websites where the movement of trading rates of currencies is shown in different automated ways. This may be in pips or through percentage differences or by comparing the values of indicators like the RSI, Moving Averages, MACD, Ichimoku etc. On my blog a Heatmap is available that can be of use also.








"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination.
The comparison table provides a way to compare currencies from a longer-term perspective of 12 months and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are.


Comparison table Guide
  1. First of all better-classified currencies in combination with weaker-classified currencies can always be traded and vice versa. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  2. Second, only equally classified currencies are approved when there is a positive Currency Score difference. Also here, the trend has to be confirmed again.
    The difference between point 2 and 1 is that the long trend is not clear with 2 equally qualified currencies because that pair is in a sideways market. For that reason, the Currency Score difference cannot have a negative difference. A positive difference confirms the momentum for a short revival.
  3. Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least +4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
    The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  4. By preference, each currency should be selected for a trade with a score difference as far apart from each other as possible in the range from 1 to 8. However, these opportunities are rare and for that reason point 1 offers flexibility and is the best choice to trade, point 2 is the second best and point 3 is the third best choice.
  5. The classification of the currencies in question may change in the longer term. Even though currencies may be in the same category a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.


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Putting the pieces together

Based on the last "12 Months currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
EUR, USD and CAD.
These are Strong or Neutral currencies from a longer term perspective when looking at the last "12 Months currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
NZD, CHF and AUD.
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. There are none for this month.



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Besides this article, I also use the Forex "Ranking, Rating and Score" which is also available once a month on my blog. In the article "Ranking, Rating and Score" we look in more detail at the absolute position of the currencies and pairs.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming month.

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DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone.The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Forex Metrics and Chart Month November 2017

The Top 10 of the Ranking and Rating list for the coming month shows the following stronger currencies being well represented for going long: the EUR(4X) followed by the USD(3X) and the CAD(2X). The weaker currencies are the CHF(4X) followed by the NZD(3X) and the AUD(2X).
By diversifying a nice combination can be traded in the coming month like e.g.:

  • EUR/NZD with the USD/CHF
  • EUR/AUD with the CAD/CHF
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Ranking and Rating list

Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every month the Forex ranking rating list will be prepared around the change of the month. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.




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For analyzing the best pairs to trade looking from a longer-term perspective the last 12 months Currency Classification can be used in support.
There were a lot of classification changes last month. Here below you can see the old classification followed by the most current one:

Old Classification

Strong: USD, NZD, AUD. The preferred range is from 6 to 8.
Neutral: EUR, CAD, CHF. The preferred range is from 3 to 5.
Weak: JPY, GBP. The preferred range is 1 to 2.

New Classification
This classification was updated on 6 November 2017 and is provided here for reference purposes: 
Strong: USD, EUR, CAD. The preferred range is from 6 to 8.
Neutral: AUD, NZD. The preferred range is from 4 to 5.
Weak: JPY, GBP, CHF. The preferred range is 1 to 3.

When comparing the 12 months Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand, these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy, these pairs are not traded because these would be trades in the 4 Hour chart or in a lower Time Frame. Nevertheless, they may offer good chances for the short term trader.

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Currency Score Chart

The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is my analysis on the 8 major currencies based on the technical analysis charts using the MACD and Ichimoku indicator on 4 Time Frames: the monthly, weekly, daily and 4 hours. The result of the technical analysis is the screenshot here below.



When comparing the 12 months Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail.


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Chart of the Month




The Chart for this month is the EUR/NZD Daily chart.
Price is clearly in an uptrend and made a high lately at 1,7215. It is now consolidating below that level and around the Kijun-Sen. It may continue to consolidate in the coming period. 
  1. A nice buy opportunity would be around the current level somewhere around the yellow dotted line at nr. 1 and the Kijun-Sen. By preference the candlesticks should show a good pattern that confirms the entry. This could be the Engulfing pattern, Morningstar etc. etc. Check e.g. the following link for more information: Bulkowski's Top 10 Reversal Candlesticks. 
  2. The target should be below the latest recent high at 1,7215 where the yellow dotted line at nr. 2.
  3. The MACD should show strength in the MACD minus Signal, these are the Blue and Red bars. Either the red bars should become shorter or the blue bars larger. The MACD should stay above the zero line.
In case of a stronger pullback with price going far below the yellow dotted support line with the MACD not recovering the set-up is no more valid. A stop-loss should be placed below the lowest yellow dotted support line. Having a Stop Loss below an important recent Top or Bottom seems a good idea. These are levels where Support or Resistance may reside too. In this case, it would be below the bottom of 17 October at 1,6356.
  • This is a pair that fits best in Point 1 of the Comparison Table Guide. For more information read my other Monthly article called the "Forex Strength and Comparison".
  • The EUR is a strong currency and the NZD a Neutral currency. The Currency Score Difference is 7.
The set-up mentioned remains valid as long as the pair remains in the Top 10 of the coming Monthly Ranking and Rating lists and continues to comply with the point of the Comparison Table Guide mentioned above.


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Besides this article, I also use the Forex "Strength and Comparison" which is also available once a month on my blog. In that article, we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Weekly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article, then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming month.

______________________________________

DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone.The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Sunday, November 5, 2017

Forex Strength and Comparison Week 45 / 2017

In the Currency Strength table, the USD was the strongest currency while the CHF was the weakest. There were some significant changes last week with the CAD gaining 3 points and the GBP losing 3 points. The other currencies remained around the same level of last week with a maximum change in the strength of just 1 point.

The CAD showed a very strong performance at the end of the week. The USD
showed a steady and strong performance during the whole week.The CAD is a Strong currency and fits exactly with the current performance in the Classification and Score that it has.
The USD is a Neutral currency and do not fit exactly with the current performance in the Classification and Score that it has. However, being Neutral currencies it may offer some good opportunities against the Weak currencies.

The AUD showed a very weak performance at the end of the week and to a lesser extent the EUR and GBP. The CHF showed a weak performance during the whole week.
The GBP and CHF are Neutral currency and do not fit exactly with the current performance in the Classification and Score that it has. However, being Neutral currencies it may offer some good opportunities against the Strong currencies.

Based on the development at the end of last week and the steady performance of the currencies during the last week as described above it seems that going long with the USD or CAD against the GBP or CHF may offer good opportunities. If this is being confirmed by the analysis in both of my Weekly articles and the charts are looking in the right direction it is even better.




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 13 Weeks Currency Score Strength

The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. This data and the "13 weeks Currency Classification" are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single week, we perform several checks to avoid this.
  1. First of all the strength over a period of the last 13 weeks is considered. See each row for more information.
  2. Next, the 13 weeks average is considered, see the last row called "Avg. 13 wks."
  3. The number of weeks that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.



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Average 13 wks. Score

When looking at the Average 13 wks. Score we can see the currencies grouped together according to their classification.
There may be some doubt and in that case it could be a currency that will change its classification in the coming weeks. There are no such currencies at the moment.
  • Strong - We can see that the EUR, AUD and the CAD are clearly grouped together as Strong currencies around an Average 13 wks. Score of 5 to 7
    • The EUR is the strongest currency and continues to deliver high Scores. The AUD however, being a Strong currency, is showing a bit of weakness in the last 2 weeks.
  • Neutral - The USD, GBP and CHF are grouped together around an Average 13 wks. Score of 3,5 to 4.
  • Weak - The JPY and NZD are grouped together around an Average 13 wks. Score of 3.
The Neutral and Weak currencies are very close together and it is possible that there will be more classification changes in the coming weeks.





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Classification review

This week we take a look at the Neutral currencies. We can see that the USD and GBP gained a lot of strength in the last weeks. The GBP had a lower Score last week while the USD had 2 times a Score of 8. The USD may become a Strong currency but this will take more higher Scores during several weeks to come. The CHF is showing a very Weak performance lately and it is close to become a Weak currency.Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.






For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 29 October 2017 and is provided here for reference purposes:
Strong: EUR, AUD and CAD. The preferred range is from 6 to 8.
Neutral: USD. GBP and CHF. The preferred range is 3 to 5.
Weak: JPY, NZD. The preferred range is from 1 to 2.



_____________________________________

Currency Score Comparison

 "Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information about the currency Score of this week, you can read the article "Forex Ranking, Rating and Score" which is published every week together with this article.
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list". Only the strength of each currency against the counterparts is analyzed by using the Technical analysis charts of the 4 Time Frames that are also used for the "Ranking and Rating List".
The information from the Comparison Table is the source for calculating the "Ranking and Rating List" where this list additionally uses the volatility and statistics for creating the best and worst performer in the list from number 1 to 28.

The information is published once a week and be aware that rates change during this period. The mentioned scores also change and different opportunities may show up. There are many ways to follow the rate changes. This can be done e.g. by looking at the charts and checking e.g. the Ichimoku and/or MACD in the Weekly and Daily chart. There are also many tools, apps and websites where the movement of trading rates of currencies is shown in different automated ways. This may be in pips or through percentage differences or by comparing the values of indicators like the RSI, Moving Averages, MACD, Ichimoku etc. On my blog a Heatmap is available that can be of use also.








"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination.
The comparison table provides a way to compare currencies from a longer-term perspective of 13 weeks and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are.


Comparison table Guide
  1. First of all better-classified currencies in combination with weaker-classified currencies can always be traded and vice versa. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  2. Second, only equally classified currencies are approved when there is a positive Currency Score difference. Also here, the trend has to be confirmed again.
    The difference between point 2 and 1 is that the long trend is not clear with 2 equally qualified currencies because that pair is in a sideways market. For that reason, the Currency Score difference cannot have a negative difference. A positive difference confirms the momentum for a short revival.
  3. Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least +4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
    The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  4. By preference, each currency should be selected for a trade with a score difference as far apart from each other as possible in the range from 1 to 8. However, these opportunities are rare and for that reason point 1 offers flexibility and is the best choice to trade, point 2 is the second best and point 3 is the third best choice.
  5. The classification of the currencies in question may change in the longer term. Even though currencies may be in the same category a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.



______________________________________

Putting the pieces together

Based on the last "13 Weeks currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
USD, CAD and EUR.

These are Strong or Neutral currencies from a longer term perspective when looking at the last "13 Weeks currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
CHF and NZD.
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example now is/are e.g. the:.
USD, JPY and AUD


______________________________________

Besides this article, I also use the Forex "Ranking, Rating and Score" which is also available once a week on my blog. In the article "Ranking, Rating and Score" we look in more detail at the absolute position of the currencies and pairs.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

______________________________________

DISCLAIMER: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone. The content is for educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.