Currency Strength & Weakness without Indicators!

[Trendswithbenefits]

Stream of Consciousness strategy… Just going to throw a concept I am considering developing into the fray here… rating currencies via the economic strength / weakness of each of the major origin countries.

I haven’t finalised the input data to generate the rating formula… but it will include, financial indicators, effects of pandemic etc…

So, as of the (New York Close) 8.00am 10th July 2020 (UTC+10) the SOC rankings are…

NZD - AUD - JPY - CHF - CAD - GBP - USD - EUR…

Now when compared to the proven SWA formula (Distance from the SMA200 on a 4H TF)

NZD - AUD - CHF - EUR - GBP - CAD - JPY - USA…

We can make an attempt to predict currency movement… NZD, AUD, CHF, CAD, USD are all pretty much in their correct positions of strength (compared to the SWA).

We should expect over the next couple of trading periods (Say FRI 10th - WED 15th) for…

The GBP to strengthen against the NZD, AUD, CHF and CAD…
The JPY to strengthen against the CHF, CAD, GBP and EUR…
The EUR to weaken against the GBP, CAD, JPY and even the USD…

Positions applied and trialed on a DEMO… 35 pip TP’s with NO SL’s…

Lets see what happens over the next few days…

[Andrewsimmons]

Thanks for another useful video. Keep sharing.

[Trendswithbenefits]

Update after 12 hours… 210 pips closed in profit… 2%+ on Account and carrying only 0.3% DD

Needs more work… Check in again on Monday…

Note: Not sure why margin is so high on CHF… It’s a beta Platform, so might be the issue

[Trendswithbenefits]

Update after 24 hours… 280 pips closed in profit… 3%+ on Account and carrying only 0.6% DD

Check in again on Monday…

[mirags]

Seems intriguing and promising. How is the data derived to get the SOC rankings? It looks like the formula is going to be more complex than the SWA formula.

[QuadPip]

Hey Trends! This sounds like something we should be paying attention to. If it’s not too much trouble, may I request you to please create a new thread for the Stream Of Consciousness strategy?

Also, someone posed a question related to S/W trading (link below). I also have the same question. Not sure I really get how to trade using S/W analysis. Perhaps I’m just dense. Would you (or @Dennis3450) be able to elaborate on it? Some chart images and examples of entries and exits that you may have taken along with the rationale behind the trade might be helpful.

How does strong and weak analysis really work

Hello traders, there is something I want to us to discuss about trading a strong currency against a weak currency (Strong and weak analysis). For those of you hearing this for the first time, it is simply a system where you check the strongest currency amount the 28pairs for a particular period of time, and also the weakest currency among the 28pairs for a particular period of time (in my case for the last 30 days) and you pair up the strong and the weak currency together, buying/selling in the…

[Trendswithbenefits]

For anyone that is interested, I MAP Dennis’s data from the Currency Strength and Weakness Thread on a daily basis… I have posted up the results for anyone to use, copy, study etc… on here, so as not to clutter his brilliant thread.

July 2020 is now complete… Crazy, Crazy times… StaySafe people.

[Trendswithbenefits]

Another fantastic FREE resource allowing traders to utilise CSW Strategies away from Charts…

Follow this link to the Mataf Currency Strength charts you see in the diagram above.

[FOK]

If you think even more deeply about it, they are NOT pairs, they are the individual 8 currencies.

These make up the 28 PAIRS of 7 majors and 21 minors, as shown on the graphic.

You can trade the exotics at your own peril. IMHO, the exotics with USD are just a proxy for USD being strong or weak anyway.

[Trendswithbenefits]

Ok, this this week I thought I might add some content to this thread by demonstrating how to trade inside Dennis’s Currency Strength and Weakness matrix (Thread here).

Below is the matrix for September 2020… I add currency traces to the matrix on a daily basis which displays in detail what is really happening with each of the Major currencies.

Most times, a currency “crosses” over another (clearly visible when color traces are added), it is an opportunity to trade the movement and enter a small trend or a successfully early entry into a substantial trend… Last week (15th) you can clearly see the cross of a strengthening JPY over weakening EUR… resulting in a 200+ pip win over the following couple of days… Clearly displayed is the JPY’s strength over the preceding 11th and 14th and the EUR weakening over the same period…

The “Edge” of this strategy is the percentages tell the real story… not the positions… have a close look at the EUR… Even though it only moved one spot lower in the matrix, it has actually weakened consistently from the 11th… allowing the opportunity to trade any of the other Majors… strengthening over the same period… Study the image above, comprehend it, and test it against your charts…

Over the week I will show how to select currencies “of interest” and how to apply the strategy described above… 21st… AUD is weakening… noted… and at this current time all other Majors are weakening as well, the JPY against the other 7 Majors is really the only opportunities available.

Lets see tomorrow’s (22nd) result at the close of the US Session and we should have a clearer picture of what the market is going to offer…

[Trendswithbenefits]

Another way to trace Currency movements is to use a simple CSW Meter as shown below which displays updates 6 times over 24 hours (4 hour TF)… Using this in conjunction with the Matrix Strategy gives you a visual reference to what the market is really doing at any given time…

Settings: 200 Periods | 4 Hour TF (As the Matrix Formula)

ie: Clearly displayed, within the Matrix (Post above) and shown in the CSW Meter (above) is the recent cross of the CAD below the JPY… a “Pair of Interest” for the 21st.

Resources: Ctrader CSW | Metatrader 4 | Tradingview (TBA)

[Jahruhay]

Nice post trends, looking forward for the succeeding posts and learn from it.

[Trendswithbenefits]

Tuesday (UTC+10) We can see that the AUD has weakened substatialy from yesterday and the JPY has strengthened against all other Majors as was correctly indicated 24 hours ago… Simple…

And our short from yesterday’s data, the CADJPY is now up 70+ points early in the Asian session… I’m not even going to include other positions opened with a strong JPY yesterday…

Now we have to choose the best opportunities from this weeks tumultuous market… And there is lots to choose from…

On appearance it looks as if he USD has shot up the rankings… wrong, in actual fact it is weaker than the 17th and 18th… ALL currencies have once again weakened against the Yen…

So we look for the weakest weak and the strongest weak. This is done by calculating the percentages within the Matrix… ie: CAD has weakened -1.27% since the 17th (3 periods) while the JPY (base) is still 0.00% confirming our short on the CADJPY is still in play 24 hours later… Let’s find another pair…

NZD has weakened 1.35% since 17th (3 Periods) and the CHF is 0.82% weaker over the same period.
This leaves a variance of only ~0.5% (I prefer 1%+ Variance) giving us another pair, other than all the JPY crosses, to keep an eye on.

NZDCHF is changing, AUD is weak, JPY Still Strong, confirmed on the CSW Meter… (4 Hour)

OTC market behavior has to be carefully considered when using the CSW strategy. It is generally what can cause the prefered pair (ie: Strongest/Weakest Pair) to reverse sharply from each end of the Matrix…

Once a sizable volume and momentum is obvious, the “market” will Sell into Long and Buy into Short sentiment. As happened yesterday with most of the JPY pairs… This is how the LP’s take liquidity out of the market and make their money… the Brokers are just along for the ride…

Summary: ALL JPY pairs remain shorting opportunities…

Edit: Is there a possible arbitrage opportunity between the Matrix and the CSW Meter???

[janey001]

Nice trend…Will keep up with it.

[Jahruhay]

Difference from the 17th and 21st. This is 3 periods. When you bought USDCAD and shorted NZDJPY. You could have gained a lot of pips from now.

[Trendswithbenefits]

Hey @Jahruhay, You have put together a very clever concept… Keep improving and developing on filtering the pairs and I believe you will have an exciting strategy…

“Innovation will always come from outside your particular Industry…”

Total respect for systems from the left of field… Ideas from outside of the box is the only way forward…

I have the NZDJPY since yesterday , no positions with USDCAD…

[Jahruhay]

Good to hear from you trends, thanks for sharing your ideas. I’m looking forwad towads your inisghts everyday.

All the best

[makneel]

Hi @Trendswithbenefits , few changes after adding few strategy tools told by u. lets c if it works today.

[Trendswithbenefits]

Wednesday 23rd (UTC+10) As can clearly be seen with the currency traces placed over the matrix the markets are in a bit of Flux… floating with no real directions over the last few periods.

AUD has continued to weaken over the last 3 periods allowing opportunities to trade against the AUD
ie: AUDCAD, AUDJPY, etc… The USD, CAD have strengthened slightly, displaying opportunities to trade only the against very weak.

Majors to weaken against the JPY are the EUR, GBP, NZD, CHF… with small declining percentages

What is highlighted is that the USD has changed very little in strength over the past few days… it’s mostly been elevated by the other Majors weakening around it… It has been quite a while since the JPY and USD have been at the head of the line…

Predominately a weakening sentiment with opportunities for the following 24 hours…

AUDUSD, GBPUSD, EURUSD, EURCAD (Short) and USDCHF (Long)

Edit: I was late in posting so this information was available 7 hours ago… In future I will post an hour after the New York open as the Asian session is practically comatose trading the last few weeks.

[janey001]

Nice set up …The long and short positions did a nice job tho although just seeing this now, sitting right for earlier trade ideas.