Using related currency pairs to help in your forex trading

Using related currency pairs to help in your forex trading

In this section from the London forex trading web class we explain how to use related currency pairs to help you in your forex trading. In this example, we use the example of the currency majors matrix to explain the principles, but this could be for any other currency.

00:12

Introduction to Majors Matrix and currency pairs

00:12

The speaker apologizes for technical issues due to logging in as an attendee without screen control. They quickly move to discuss the ‘majors matrix,’ referring to major currency pairs including the Australian dollar, euro dollar, Canadian dollar, and New Zealand dollar.

00:40

Visual perspective on currency strength and selling trends

00:40

The speaker explains a visual tool resembling a currency matrix that shows the strength of the US dollar against major currencies. It highlights current market activity, noting strong selling pressure on the British pound and significant buying in the Australian dollar, which is also reflected in the British pound-US dollar pair (cable). This tool provides a clear visual perspective on currency strength and market trends.

01:08

Dollar and Aussie dollar momentum analysis

01:08

The speaker explains why the Australian dollar hasn’t mirrored a particular move seen in the US dollar. The Australian dollar is moving similarly to the US dollar, resulting in no divergence of momentum. This means there isn’t a strong buying force counterbalanced by strong selling, unlike the British pound, where strong selling was balanced by strong buying.

01:37

Divergence in currency movements and volume perspective

01:37

The speaker discusses the reaction of the dollar relative to other currencies, noting a distinct downward movement in the euro against the dollar, unlike in the Australian dollar. They highlight the benefits of using a matrix approach to trading, which offers a unique perspective through volume analysis and volume price analysis (VPA), enhancing the understanding of market behavior.

02:10

Inverse pairs and volume triggers explained

02:10

The discussion explains the dynamics of the USD/CAD currency pair, highlighting that selling the dollar is reflected in selling this pair. It emphasizes the use of multiple indicators, including a trend monitor and volume analysis, to confirm market movements. A rising volume followed by a volatility trigger on USD/CAD suggests that traders can expect either a reversal or market congestion. The analysis encourages viewing related currency pairs through the lens of the dollar to gain additional insights from charts and indicators.

03:11

Tick speedometer and activity indicators overview

03:11

The segment explains the tick speedometer indicator at the bottom of the chart, which reflects market activity levels. Green indicates rising activity, orange shows moderate pace, and red signals low activity or congestion phases where price spreads narrow. The tick speedometer helps visualize participation alongside volume, providing valuable insight into price action dynamics. The speaker also references the Dollar Swiss chart displayed at the bottom right.

04:07

Correlation between dollar swiss and euro dollar

04:07

The speaker explains the inverse relationship between euro dollars and the dollar Swiss, noting that when euro dollars fall, the dollar Swiss typically rises due to a strong correlation between the two. Although this correlation is not perfect and can fluctuate, it remains a useful indicator. The discussion then shifts to the use of multiple charts displaying associated currency pairs, which provide extensive information. The speaker recommends using or creating such a matrix of currency pairs, like the currency matrix tool, to gain deeper insights, including volume perspectives, which can help predict future movements in pairs such as cable.

05:07

Support levels and congestion in cable trading

05:07

The discussion covers a support platform emerging on the accumulation-distribution indicator and significant price levels, including the volume point of control, suggesting expected congestion in the price action. Traders considering a scalping trade are advised to be cautious of these levels and understand the underlying forces driving the move. The price movement in the cable (GBP/USD) is influenced by both strong buying of the dollar and strong selling of the cable, indicating symmetrical forces rather than one-sided pressure.

05:57

The segment emphasizes the high risk of entering trades near congestion areas and the volume point of control, suggesting that jumping in immediately may not be ideal. Candlestick patterns showing rising volume into weakness indicate selling pressure from market makers. However, if the price breaks through this congestion and downward pressure persists, it could present a favorable trading opportunity as the volume diminishes and the price falls into lower volume regions.

06:52

Trading platform updates and educational resources

06:52

The presenter acknowledges running over time and apologizes for minor technical issues. They direct viewers to quantumtrading.com for access to all indicators compatible with MT4, NinjaTrader 7 and 8, and TradingView. They also mention ongoing work on supporting TradeStation platforms, confirming thorough testing and functionality on TradeStation 9.5.

07:20

The relationship between TradeStation and Interactive Brokers is explained, highlighting the use of Interactive Brokers’ data feed within TradeStation. This setup offers powerful trading capabilities combined with the benefits of a low-cost brokerage. The current TradeStation 9.5 version is emphasized, along with the upcoming TradeStation Securities version 10, which includes features like RadarScreen.

07:47

The presenter praises TradeStation as a highly powerful platform and announces upcoming webinars to support its launch. They introduce the comprehensive forex trading program available on the site, which covers multiple modules including relational trading, fundamentals, technical analysis, volume price analysis (VPA), and trading mechanics, designed to provide all necessary knowledge for beginners.

08:14

An emphasis is placed on starting with the psychology of trading module, which helps traders understand their personal strengths and weaknesses through a detailed test. This self-awareness improves the likelihood of success by aligning trading strategies with individual personality traits and managing weaknesses effectively.

08:39

The program includes over 200 hours of video content covering VPA chart examples, indicator usage, integrated trading techniques, webinars, and extensive resources. It supports multiple platforms with a full suite of trading indicators and will soon include TradeStation. The content is supplemented by the VPA Traders Room, hosted daily by the presenter and Anna for ongoing support.

09:06

Contact info and webinar schedule details

09:06

The speaker directs viewers to Anna’s website, anacooling.com, where all her books are available in Kindle and paperback formats on Amazon, along with blog posts and analyses. They also mention Anna’s Forex Facebook page for questions and provide contact emails for further inquiries. The session is wrapping up with a note about the lively trading session and a reminder about the next meeting scheduled for Thursday at 7:45 London time.

By Anna Coulling – creator of volume price analysis