How to select the best currency pair with the strongest trend

How to select the best currency pair with the strongest trend

How to select the best currency pair with the strongest trend using the currency majors matrix. Here we focus on the USD and see which pairs are trending and which are not, but more importantly why using the currency strength indicator.

00:16

Introduction to currency strength matrix

00:16

The speaker begins by ensuring their microphone is on and introduces the topic centered around the ‘dollar workspace’ or ‘dollar matrix.’ They mention focusing on six out of seven currencies, including the dollar and yen, and emphasize the importance of understanding which currencies and currency pairs are actively moving and which are not.

00:44

Dollar and Swiss franc price movements

00:44

The discussion focuses on analyzing the CSI to understand market movements, specifically why the dollar and Swiss franc are moving the way they are. The speaker describes a clear price waterfall effect with falling prices, widening spreads, and rising volume, highlighting the textbook nature of this market behavior. The dollar is selling off while the Swiss franc is rising strongly.

01:12

Dollar CAD congestion explained

01:12

The segment explains the current market trends with strong buying activity in the Swiss franc and strong selling in the US dollar, though the dollar’s movement is less pronounced. It highlights that the USD/CAD pair is in congestion because both currencies are moving in the same direction, making the trend visually apparent without needing to analyze charts deeply.

01:36

Currency strength indicator as market radar

01:36

The currency strength indicator acts as a market radar, showing currency movements and correlations. At this moment, the MT5 cable pair was moving sideways because the pound and dollar were moving in the same direction. For scalping traders, it was clear which pairs to focus on, such as the euro-dollar pair, which was trending strongly upward with good volume and momentum.

02:08

Strong trends in Euro and Yen pairs

02:08

The discussion focuses on currency movements, highlighting that the euro is rising against the dollar while the yen is falling. The Swiss franc is also gaining strength. Momentum is developing in the British pound against the dollar on a five-minute chart, as the pound strengthens while the dollar continues to weaken. In contrast, the Australian dollar is moving sideways with less pronounced trends, making it a less favorable choice for trading compared to more active pairs like the euro-dollar or dollar-Swiss franc. The speaker advises against struggling with minor trends such as the Aussie dollar and suggests focusing on pairs exhibiting clearer momentum.

03:05

Scalping vs slower trading strategies

03:05

The segment explains the nature of scalping trading, emphasizing the need to be quick and adaptable, which suits some traders’ personalities but not others. It acknowledges that many traders may not have the luxury of spending all day in front of the screen to trade frequently. For those without that time, slower, longer-term trading is recommended. Additionally, it advises keeping a day job while learning to trade. The discussion also introduces a tick speedometer tool applied to the chart to aid trading decisions.

03:53

Visualizing market activity and sentiment

03:53

The speaker discusses visual indicators for market activity, emphasizing the importance of seeing green and orange rather than red to signal strength. They note a drop-off in the dollar versus the Swiss franc, highlighting that the dollar is strongly oversold while the Swiss franc is nearing an overbought level. Cable (GBP/USD) continues its movement with the dollar selling off. Additionally, the speaker explains how a trim monitor provides an instant visual summary of market sentiment, showing bullish and bearish signals across currency pairs. This visualization helps quickly gauge broad market sentiment and pair rankings, which is further detailed in a currency matrix tool.

04:53

Currency heat map and sentiment weighting

04:53

The segment discusses the dollar’s universal buying and selling trends, focusing on the currency heat map to illustrate dollar weakness. The heat map presents two key aspects: intraday bullish and bearish sentiment within cells, and a ranking ladder weighted by time frame strength. The euro-dollar pair shows strong bullish sentiment intraday, while the ranking ladder emphasizes longer-term perspectives where weekly or monthly trends carry more weight than minute-by-minute changes. This ranking ladder moves slowly and is used to assess broad market sentiment and extremes, similar to the Commodity Selection Index (CSI).

06:46

Ranking ladder and long-term sentiment

06:46

The speaker explains a bearish market sentiment towards the dollar, noting that despite some bullish indicators, the overall trend is heavily bearish. This sentiment will eventually shift, which will be reflected in changes in the fastest trading cells, starting from the bottom and moving upwards, or vice versa for the euro dollar. This process takes days or weeks, not minutes or hours. The indicator discussed is a two-sentiment tool showing real-time bullish and bearish market sentiment through flowing cells, which are weighted on a ranking ladder by their importance. It is particularly useful for slower-term traders to identify currency pairs that are heavily oversold or overbought. When used alongside charts, volume, price analysis, and other indicators, it provides a comprehensive radar of the market, especially valuable for intraday trading by offering a quick visual overview.

08:05

Quantum Trading educational resources

08:05

The speaker provides an update on bullish sentiment for intraday traders and apologizes for going slightly over time. They highlight new videos recently added to the Quantum Trading Indicators YouTube channel, focusing on the TradeStation platform, which is nearing launch but still requires two to three weeks of testing and preparation. Although the videos are TradeStation-specific, the underlying principles apply to other platforms like MT5 and NinjaTrader. Viewers are encouraged to check out these videos for valuable insights. Additionally, the complete Forex trading education program available at quantumtradingeducation.com is introduced, covering essential topics including trading psychology, fundamental analysis, and more, aimed at helping traders succeed.

09:29

Understanding risk-on and risk-off

09:29

The segment explains how risk is identified through understanding related markets and their signals of risk-on and risk-off sentiment. It emphasizes that the market essentially operates on a balance between seeking higher risk for higher reward and finding safe havens for lower risk. The constant flow of money moving between these states drives market dynamics. By grasping this relational aspect, one gains crucial insight into risk analysis. The discussion also touches on technical analysis, volume and price analysis, and trading mechanics, highlighting that these principles apply universally across different trading markets.

10:25

Comprehensive forex trading education

10:25

This segment introduces a comprehensive trading education program featuring over 200 hours of video content covering trading mechanics, tactics, timing, and indicator usage with real chart examples. The program includes a members’ room hosted daily by the speaker, where students and experienced traders interact freely to answer questions. It also highlights the availability of trading indicators compatible with multiple platforms, including Trader MT4/5, TradingView, and upcoming versions for TradeStation, emphasizing the partnership between Interactive Brokers and TradeStation 9.5.

11:26

Indicator platforms and TradeStation launch

11:26

The speaker discusses the deep discount brokerage linked with Tradestation charting, highlighting Tradestation 10 as a comprehensive platform with advanced features like radar screen. They express excitement about its launch and also mention Anna Cooling’s website, annacooling.com, where viewers can find her books and analysis.

11:53

Contact details and session closing remarks

11:53

The speakers provide their contact information for any questions and thank the audience for attending the session. They express appreciation and encourage everyone to enjoy the rest of the trading session and week. They also remind viewers about upcoming sessions on Thursday afternoon and next week, wishing everyone well and safe.

By Anna Coulling – creator of volume price analysis