Today is a good example of how we analyze the market when there is 1 clearly strong or weak currency along with several currency choices to possibly pair it with on the other side.
First off, we don’t have much happening during the London session until over 20 minutes into it which is another lesson in having patience.
Finally, we have the AUD (orange line) which is clearly the weakest currency show some huge momentum with a steep line to the far right heading down.
But, there are 3 possible currency pairs on the strong side to potentially pair with the AUD. The GBP (red line), JPY (yellow line) and USD (blue line).
Which do you choose?
The best way is to look at the charts to see how much momentum is pushing prices.
Let’s compare the AUD/USD to the GBP/AUD:
At the time we see the momentum show up on our indicator, you can see that the move on the AUD/USD is only 10 pips while on the GBP/AUD it’s 25. The higher probability situation to grab a quick profit would be:
GBP/AUD BUY
You can see that even if you entered at the close of that price bar, you would have got your 20 pip profit target within the next 15 minutes.
Being able to judge the current momentum in the market will give you a higher probability of a positive trade and better timing to grab those profits quickly.
You can watch the entire video analysis below:
by James Edward
http://completecurrencytrader.com/
