To be fair Mr Johnny, same and similar questions are asked weekly. So this has been asked before, and answered before. There is a wealth of further information in the thread. If you read it from start to finish, you will be wiser totally.
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Well, thatâs an assumption on your behalf, I did read quite a bit of the beginning posts. I did not find any answers to my questions. Sure, the JPY is ranked against other pairs, but why the YEN? It is a base currency, sure, so is the EURO. Donât see anyone using that even though itâs probably more volume traded.
There are tons of CSM out there to do these calculation; even this could be coded, why hasnât that been done, be worth itâs weight in gold the way you guys are defending it. Why the 4 hour only? Why the 200 SMA? What is the magic?
If I find those questions answered in the thread, I will be very surprised. Where is the trading plan" What are the entry criteria? The initial stop loss, the exit?
See you later, thanks
I asked the Yen question over a year ago. I had my own assumptions (political stability, non-commodity, unchanging interest rates), but Denis replied that it is basically the easiest to administer, as it always quoted second in any pair (simplicity is king). I donât think anyone is defending the method, it speaks for itself, but yes possibly defending the OPâs time, as the questions have all been asked before. As regards trading plan, it has all been asked before too. The answer is in the thread.
I have read most of the thread, this is why my curiosity has been stirred up. Yes, I get it is a ranking system, yes, I understand they are against the YEN.
What I donât get, what is the logic? Apart from the base currency or quoted as you say, making it easy to work with; surely there is more to that than just âsimplicity is bestâ?.Maybe thatâs what the big banks use.
I already said, the EUR would be as easy to would with, it is more traded, why not use that. Maybe someone that has experience with using the spreadsheet, and has an ounce of curiosity might plug those numbers in there just see what the result is.
Also, I see many, many times, the figures are from the 200 ma on the 4 hour. Do I dare ask, is it the SMA, EMA, LWMA? Is it the Close price, open price, median price?
I shall keep reading, but Iâve been on a few forums and I tell you, when a question does get asked multiple times, usually that information is NOT in the 1st post.
Structure of this place is sadly lacking also and if you donât agree, you donât read many forums Iâll bet.
Good day to all, may thanks
Joined 23 hours ago
1h read time
315 posts read
1324 posts in the thread.
Interesting that a little less than 25% of total reading on the site equates to âMost of the threadâ
Sorry - I have tried to understand why you donât comprehend the âlogicâ of a common denominator - but I am at a loss to understand your problem !
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So 9 posts later, and the discussion has gone nowhere. @FX_Johnny, read the entire thread, literally the entire thread, then see if your questions have not been asked and answered. The weekend is coming up, so clear up your diary, and get to reading.
You will find that the discussions are quite interesting.
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Here 10 months - 14 posts 16 âlikesâ !
That has got to be some sort of a record ! 
As has been said, it is simply because all currencies are quoted XXX/JPY. You could use, for example, a USD base but some currencies are quoted XXX/USD and others USD/XXX, which requires a little more mind-bending and formula adjustments to make sense of the strong v. weak. The point is that it really does not matter which currency is used as the yardstick because it is just the reference currency. The relative strengths of various currencies come out approximately the same whether you use USD or GBP as a reference base currency.
You are NOT trading against the JPY! The idea is to use the the currency pair made up from the extreme left of the table and extreme right because these are currently the strongest and weakest. You would only trade against the JPY when the JPY itself appears as either the strongest or weakest currency at one end of the table or the other.
Yes it can, but the 4H 200SMA value does not change that much in one bar. Although the 4H MA is used the method is based on daily closes, not every 4 hours. The key values are the daily close relative to the value of the 4H 200SMA at the end of day (of course, you can calculate whatever you like, if it works for you!).
There is not magic, nor does it âalways workâ. As I understand it, the choices have evolved from a long periods of trials and testing by Dennis, who has worked this approach from many years. This is a tool to assist trend traders and it needs to be sufficiently responsive to avoid missing too much of a trend but sufficiently stable to avoid being whipped around. I guess this choice proved to be the optimum level here.
Then be surprised, all the above is in the thread, but I agree it is always difficult to find details on very long threads. One problem with this forum platform is that one cannot edit the 1st post ad infinitum. It would be very useful to be able to update and add all core data there.
You have to understand this thread and method is NOT a trading method. It does not tell you when to enter and when to get out. It is a tool for trend traders to help optimise their results by identifying which pairs are trending strongest. The idea is that you, the trader, use your own trading methods with your own entries and exits. Everyone uses this differently, as can be seen in the thread posts from time to time. Having said that, at least the entry is relatively clear since it depends on whenever the daily analysis highlights a new pair of strong/weak extremes.
Hoewever, Dennis has made a few comments here and there such as taking some profits when milestones such as 100 pips or 200 pips etc are achieved - but basically HOW you trade this analysis of the relative currency strengths is entirely up to you - the trader.
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Back on topic, Yahoo Finance agrees that our newest Top SW Trade GBPCAD* should continue lower, I wonder if they follow this thread, 
https://finance.yahoo.com/news/canadian-dollar-correct-higher-against-161700077.html?.tsrc=rss
My bad, the above article was dated May 11th, 2017, funny how it just popped up as a new posting, anyway, there could be a seasonal thing in play here as well
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Is it only the strongest and weakest pair that can be traded from the SW table?
You can trade any strong currency with a weak, but if you match say the #3 currency with the #6 your odds of a winning trade will be less then matching #1 to #8, but it is all up to you, if you feel confident that #3 is on its way to #1 and #6 is on its way to #8 then go for it, I provide the rankings , how you trade them is all up to you,
Good Luck
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I use a difference of 2% or more between the currencies before trading them.
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Hi Dennis,
Thank you for sharing your knowladge with us. 
I am using the same strategy for almost about a year. I noticed that usually the pair reverses upon the SW signal and then goes back in the intended direction, similar to the trade in this post. Could you please shed some light on what type of a entry/stop method you are using to stay in the trade during these retracements? Thanks 
I use position size to limit my risk and ride out the retracements, I do not like Stop Loss orders, but prefer to make a mental stop and have the discipline to get out of a trade when reason for being in the trade changes. I will use a break even Stop order after hitting my first profit target. I do use Sell Stop orders to take profit at my first target point. The GBPNZD trade was a great example how patients is needed at times,
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How can one tell if a price move is a pullback or reversal?
Thanks for excellent and informative reply, much appreciated. I have been battling Windows 10 update issues all weekend so sorry for slow response. I will now join the silent majority while watching the weekly advisory pairs and evaluate how they are performing.
Good luck to all
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Good week for our TOP SW Trades, Lastest Top Trade GBPCAD* pulled back a little on Friday, I will be watching this one as we go for our 20th winner in a row
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We never know for certain but the market can give us clues in form of reversal signals like Engulfing or Pinbar candles, Reversals happen quickly with a big move while pullbacks tend to be much smaller moves and take much longer
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Speaking of pullbacks/reversals, AUDUSD a Top SW Trade from January went on a 700 pips bearish run, but last week had a strong looking Doji Star reversal, could this spell the end to USD strength
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I hadnât noticed that - Thanks, Iâll examine a few examples !