Have you ever wondered why you are buying the currency pair EUR/USD and you are stuck in the trade for over three hours without no significant? You get frustrated why there’s no movement in the pair and instead it’s ranging. Then you start to ponder whether you did your analysis well enough. After waiting endlessly for a big move to occur which hasn’t, you decide to check another currency pair for example GBP/CHF to see the activity going on there and to your greatest surprise you find out that it has moved over a hundred pips.
You start to wonder why your trade is just ranging and another pair is trending nice without hassle. Well one of the secret to making a lot of money in forex trading is:
-First it is to identify the currency that has the biggest chance to appreciate.
– Second it is to identify the currency that has the biggest chance to depreciate.
– Third is to match those two.
In doing this, you have to compare the strength and weakness of a particular currency amidst seven other currencies. This way you will know which currency/currencies is/are strong or weak in correlation with other currencies. After deriving the strong and weak currency/currencies, you pair them together and see if it blends on with your trade-set up.
Say for example you check the currency meter and you discover that the strongest and weakest pair on board is the GBP/USD respectively. If your trade set-up gives you a buy signal, then it’s a good one as the GBP is the strongest and USD is the weakest. On the other hand, if the meter is telling you that USD is the strongest and GBP is the weakest on board and your trade set-up gives you a sell signal, then it’s a good one.
Another useful way to use the currency strength meter is to wait for the release of an economic news report and then pair the currency in question associated with the news release with a strong or weak currency. It can also be used to trade at the open of a new trading session i.e. the London, New York, Sydney and Asian session
Please download the free currency meter software here and run it after download