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Currency Strength And Weakness

Published 09/19/2012, 12:35 PM
Updated 07/01/2024, 05:16 AM
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Often in Forex trading we hear the term 'trade strength against weakness', however sadly not many follow it.

Determining a strong and weak currency before entering any pair is the most important criteria, infact i'd say it's the core of analysis.
There are numerous brokers who offer currency indexes in mt4 chart format, which makes life easier in analysing currency pairs.

Yes there are many free and good systems available online all that needs to be done is have a constant check on the strength and weakness of individual indexes.

Simple Daily Time frame analysis of the currency indexes and keeping a track of major news releases is just about enough to enter trades and stay in them for longer periods.

Take a look at the images below.

This is my first article, which should give you an overview on analyzing individual currency indexes then pairing them accordingly, all of which gives you an edge on your trades. I personally use a simple system to analyze strong and weak currencies and stay in the trade for longer time on a lower leverage.

See you in the next article with more indepth insights. Feel free to ask questions.

Regards
Nitin Suvarna (Forexmechanics)

Disclaimer: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest money you cannot afford to lose.
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