The Best Forex Trader In The World - Trading Correlated Pairs
The Best Forex Trader In The World If you are looking to become a successful trader then you may want to consider trading correlated pairs
. This style of trading is both a method of trading as well a system of finding entries and making very profitable exits. To make the whole thing easier to understand, let's first explain "correlated pairs." There are some forex pairs that, for one reason or another, have a tenancy to move together. As an example, the Euro and the Pound. For somewhat obvious reasons, if the British Pound is getting stronger, that typically means good things for the eurozone in general and thus a strengthening Euro as well. Currencies that are likely to be correlated are very often found in "trading blocks" such as the Euro and the Pound or the Australian Dollar and the New Zealand Dollar. In fact, if you look at it historically, the most correlated pairs... or the pairs the most likely to move together, are EURUSD and GBPUSD. Right behind that are EURJPY and GBPJPY. Now, if you look at it. The US Dollar and the Japanese Yen are also highly correlated as a result of their status as "safe haven" currencies thanks to the very large and developed economies. That means that EURJPY and GBPJPY are very likely to move with EURUSD and GBPUSD. Take a look at what is being constructed. In all four cases the European currencies are on the "right" side of the currency cross and the "safe haven" currencies are on the "left" side of the currency cross. That means that if you take a look at charts on the 4 hour or longer time frames, you should see these four pairs showing very similar patterns and directionality... and in fact that is the case. Those four pairs move together nearly 88% of the time. The Best Forex Trader In The World Relatively safe trades can be found simply by finding times when those four are moving together and trading in the direction of that prevailing trend. Of course that leads to a discussion on finding a strong prevailing trend during a time when you can make profits relatively quickly and easily. So, lets talk about finding a basic entry. Finding an entry involves the use of two time frames. The first time frame used is the 1H... and for that you will want to look at Heiken Ashi candles. So, open chart windows for all four pairs, and add that indicator. What you want to find is times when there are three consecutive Heiken Ashi candles among ALL FOUR pairs that are in agreement... and in the same direction. That does mean that one or two of the pairs may have five or six of the same direction candles before ALL of them have three in a row. What that does is establish the trend. Now that you have a trend, and know what direction you will be trading, take a look at EURUSD on a five minute time frame and place a MACD set at 9, 20, and 5. What you want to do is want for "retrace and resume". What that means is that you should see MACD in the same area as the trend. Wait for it to swing to the opposite side of the 0 line and then both main and signal lines to return back. That's your entry FOR ALL PAIRS. Now, simply wait for all four pairs to move 120 pips, as a total amount across all four pairs (e.g. 30 pip average movement) and take that as your exit. Now, what I have explained thus far is the BASIC set up and the basic entries. You will want to add in other indicators to help you enter "on swings" instead of too late into an already underway movement. The Best Forex Trader In The WorldThe Best Forex Trader In The World - Trading Correlated Pairs
By: Forex Expert How To Search for Resumes Online Should You Get Your Credit Card Online? What You Should Know About the High Tech Trend Put Down the Pen! Online Credit Applications Are the Fast and Easy Way to Go! Life Made Simpler - Online Debt Consolidation! The Best Strategies For Online Stock Trading! You Don't Have to Be a Full-Time Trader to Deserve Respect! Day Trading Made Easy! Here's How To Start Trading Online Learn Hebrew Online online day trading How To Apply Online degree Program online stock online stock broker online stock brokers