Hi Roberto:
I have a few more questions:
How many currency pairs are you watching? Do you think I should add/remove any pairs from my list?
AUDCAD, AUDUSD, CHFJPY, EURAUD, EURCAD, EURCHF, EURGBP, EURJPY, EURNZD, EURUSD, GBPJPY, GBPUSD, NZDUSD, USDCAD, USDCHF, USDJPY
When do you move your SL to BE? Do you have any rules for that?
Please have a look at my previous post. Did I misinterpreted the chart or was it just bad luck? I would really appreciate some feedback so I can learn from my mistakes.
Roberto_Dinero:
This is nothing to do with Einstein! I can’t remember offhand the actual term for this bit of theory but it’s good to know.
Any pair can be analysed a number of ways but one way often overlooked is the “relativity” between the pairs.
I’ll do best to give an example… I took the chf/jpy trade the other night for a few different reasons but part of it was that usd/chf looked like making a bounce upwards and usd/jpy looked like dropping making chf/jpy a really good move.
Think about it, chf/jpy is a direct calculation of usd/chf and usd/jpy…
usdchf up = usd up AND chf down
Put the two together and you get chfjpy down.
This isn’t foolproof as it depends on the relative move between the two pairs but if they both go the way you expect the cross between the two will go your way.
So, if you have two majors giving you likely but unclear and therefore untradeable signals, check the cross, it may just give you a nice trade.
Google Parallel and Inverse Analysis - Mark McDonell has done a good job of explaining it in a free article…