I have decided not to trade this system per sé. But I value certain ideas about looking at relative strengths among currencies for making overarching decisions. I have already begun doing the calculations, including XAGJPY, XAUJPY and ZARJPY.
For example, I want to trade the ZAR. So per this Strong Weak analysis, I’ll look at ZARJPY, even though I can’t trade it. ZAR is weak. I already know what to think about USD, EUR, and GBP from strength analysis, and it quickly becomes clear to me that EURZAR is the preferred option, at least since its peak on Sep 4. The moves are about 10% larger vis a vis USDZAR, and the patterns are clearer, signals are stronger.
This Strong Weak discussion does not provide me with entries and exits, but it does help me conclude that, in the current market environment, I have a better chance at success trading EURZAR. So that’s the pair I’m watching for an entry, if and when I get a buy signal.