Forex Technical Analysis based on experience and research.

Explanation Articles

The Top 10 of the Ranking and Rating

The articles provide the Top 10 of the Ranking and Rating. See an example here below

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 GBP(5X) followed by the EUR(2X) with the CAD(2X). The weaker currencies are the JPY(4X) followed by the USD(3X).
By diversifying a nice combination can be traded in the coming month like e.g.:
  • GBP/JPY with the USD/CAD
  • GBP/USD with the EUR/JPY


Ranking and Rating list

Here below you can see an example of the Ranking and Rating list as provided in the articles.

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.


Currency Classification

The articles provide the updated Classification every time that an update occurs. See an example here below.

For analyzing the best pairs to trade looking from a longer-term perspective the last 12 months Currency Classification can be used in support.
This classification was updated on 3 January 2018 and is provided here for reference purposes: 
Strong: USD, EUR, AUD, CAD. The preferred range is from 5 to 8.
Neutral: AUD, NZD, GBP. The preferred range is from 2 to 4.
Weak: JPY, GBP. The preferred range is 1.

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.


Currency Score Chart

Here below you can see an example of the Currency Score chart as provided in the articles

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 3 Time Frames: the monthly, weekly and daily. 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.


 12 Months Currency Score Strength

Here below you can see an example of the Currency Strength table as provided in the articles

The 12 Months Currency Strength and the 12 Months Average are provided here below. For more information check the page Explanation Articles on my blog.
  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.


Currency Score Comparison

Here below you can see an example of the Currency Score comparison table as provided in the articles

 "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 colouring 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.