It is just so typical, new traders not looking at the overall condition or direction of the pair, and then taking a position on a small snippet of data thinking “ohhh it has to come down now, look at how high it is”. They could have wandered over here, looked at your numbers, looked at the daily trend, and with just these two pieces of data, they could figured out that a short at this point juuuuust might not be the best position.
The Ever Fascinated By Human Behavior VIPER
Quick round up of my Top SW Trades, Current top trade GBPJPY hit a high of +163 pips today before pulling back, and is up in early Thursday trading, previous Top Trade GBPNZD had a hard 3 day pull back after giving us +191 pips. Banking profits at 150 pips as a first target has worked well this year, and would be money in the bank on these GBP trades
YTD top trade EURUSD is pulling back as the dollar is on a bit of a rally here, USD is still weakest currency year to date, but I would not stand in the way of this rally, just let it play out and market will tell us when to go short again.
Hi Guys,
I just wanted to share some info with you:
I have been trading a similar system to this that I developed which is based on the same principle, and have recently automated it (so that I don’t miss any intraday strong weak signals while i’m sleeping/working, etc). For the past 217 trades (when automation started) here are the stats:
I prefer to use the median win/loss, because it is less sensitive to outliers (those excessive wins we all like). This gives us:
So as you can see, the system gives a very nice risk reward. Although the win rate is low, the average (or median) return far outpaces the average (or median) losses. And there in lies the EDGE in Strong/Weak trading. On average, the losses are small (exit the trade when price moves against you, and crosses below/above 200MA). In my case my worst loss was $36.25. Best win was $183.33. So make sure you enter trades close to the MA; I’m still trying to find the optimal exit conditions which maximize profits.
Cheers
Nice work.
What are your criteria for “strong” and “weak” currencies?
I determine strong weak in the same way as Dennis, I just determine the strength doing the calcs every 15 minutes, not just against the Yen, but each currency against every other one,before summing up for each currency. But, the 2 methods pretty much yields the same results.
I trade the top/weakest against the lowest/highest 3, provided they are not too far away from the 200 MA. I also look at the 2nd strongest against the 2nd weakest.
I place trades on both the 4hr and daily timeframes.
Based on my statistics (I’ll wait to gather more data) , I want to determine which combinations are actually yielding the higher probability trades. Might end up cutting 2nd strongest vs 2nd weakest. I’ll also have a look at whether one timeframe is more profitable than the other.
Big D, ummm, well, thank you for today. Second green bar close above 151.80 on 5 min fractal, entry. The run was a thing of beauty.
The Ever Getting Closer To A New Panamera VIPER
Another strong day for top currency GBP and another big move up for our Top SW Trade GBPJPY hitting a high of +232 pips, previous TSWT GBPNZD ended it’s 3 day pullback with a big up candle and back into positive. TSWT from Sept 12th CADJPY is still positive and grinding higher. We keep banging out winners here, congrats to everyone profiting form these moves and thanks for your kind words and updates. 
Hey Dennis, great work you doing here. You have given me a great metric to determine the strength of a currency on a daily basis.
I have a question regarding the computation of the numbers. I would really appreciate if you can enlighten me on this.
EURGBP 0.88123
GBPAUD 1.71234
GBPNZD 1.86789
GBPUSD 1.35678
GBPCAD 1.67890
GBPCHF 1.31234
GBPJPY 151.712
My broker display EURGBP instead of GBPEUR. Do i need to do a conversion of EURGBP to GBPEUR?
For eg. 1/0.88123 = 1.1347 (GBPEUR)
Do i use 0.88123 for computation or 1.1347 for computation. My logic tells me i should use 1.1347.
Am i correct?
Hi Alpha,
not sure how you are computing these numbers, I just use the Yen as my base or common denominator against the other 7, the Yen is always 0.00 . Excel formula looks like this =SUM(C4-D4) / C4 which is Price minus 4hr 200 ma divided by Price. My Excel sheet looks like this , very simple and I transfer those number to a vertical view in rank order for posting, You may also notice I leave out the decimal point in the price, one less key stroke
My E=MC2 of the FOREX market is P-M / P ( price minus moving average divided by price)
How do you derive say AUD price 8919? How do you obtain this number?
Eureka! I get it now. Yen is the denominator
So you only compute
EURJPY
GBPJPY
AUDJPY
NZDJPY
USDJPY
CADJPY
CHFJPY
Is it?
What about strength of yen?? Why you choose to leave yen out? And not other currency
Hi Dennis,
I have been trying to digest your strategy. Please take a look and correct me if i’m wrong.
Parameter,
1.Daily close
2.ema200 on 4HR chart (line construct close price)
3.Formula = (Daily close/ema200 Value)/Daily close
Base on the above chart, i derive the following conclusion. GBP and NZD are the 2 Strongest Currency. USD and CHF are the 2 weakest currency. Thus, we are looking to pair up GBP with USD and CHF. Or we can pair up NZD with USD and CHF.
Daily direction Bias are as follow,
GBPUSD Bullish
GBPCHF Bullish
NZDUSD Bullish
NZDCHF Bullish
Thus we should be looking for opportunity to buy this 4 pair.
I have included a net change in daily %. Since we are using Yen as the denominator. GBPJPY rank 1st. By default we can see that GBP is obviously stronger than Yen. However, because of a negative net change in the daily %. It shows that Yen is gain grounds against GBP. Meaning GBPJPY bullish momentum have weaken at the moment. Thus, we shouldn’t be looking to buy GBPJPY at the moment.
Please advise if i’m doing this right.
Here is review of my Top Trades for the week, there really was only one trade and that was GBPJPY, but it was a good one, until Friday. But if you managed your trade you should had banked some profits
Hi Alpha
Looks like you got a pretty good grasp on the whole rankings, one thing you are doing different then me, is you are using the 200 ema, while I use the 200 sma, it will give us marginal different numbers but who knows, maybe using the ema will turn out to be better.
Yen in my rankings is always 0.00% so right now every currency is above it’s 200 sma against the Yen , so they all have positive numbers which makes the 0.00% Yen the weakest, as the Yen moves higher and starts to pass some of the weaker currencies, you will see their % turn negative making a 0.00% Yen stronger
You are looking good
hello alpahavoc,
which programm you use for the strong/weak analysis?
Hi Maki,
I’m using apache open office spreadsheets and MT4 charts. Looking at the values from Data window. Number by Number and Chart after Chart, i input all the values manually into the spreadsheets. I have forgotten how to auto arrange with spreadsheets. Thus, i have to manually rank the Strongest to Weakest currency by eyeballing, using the keyboard and fingers, one by one i input them into the spreadsheets.
Strong Yen today as US stocks open lower, Big losers on the day were Euro and NZD. I am sitting tight waiting for the next setup
If you are just dying to get in on Top SW Trade GBPJPY, price is sitting ontop of the H1 chart 200 ma, that little red pin bar reversal just below the 200 ma would had been a good entry signal, it is a coin toss which way we go from here, but with a stop below 150.000 it is a low risk trade.
We are seeing some USD strength so why not make a little money on it, Here is USDJPY, setting up in a flag pattern, If we get a breakout a run to 114.000 is in play for a nice risk/reward payoff
I agree here Dennis, my buy order triggered over last night. I await chart weakness to get me out and seems likely it will be 114 as you say.
