We define the current climate for each currency in 3 different time periods, using a single line to indicate direction and a zero axis to indicate below average or above average. Directional currency pairing strategies become apparent once the climate of the individual currencies is clearly defined and displayed for you in three different time frames for easy analysis.
Trade Strategy Ideas
1) Zero line penetration – when a currency moves from below the zero line to above the zero line it is clearly getting stronger and further strength should be anticipated. Crossing from above the zero line to below the zero line indicates the currency is weakening and further weakness should be anticipated
2) Scissors – When a currency that is well above the zero line starts to decline back toward the zero line and a currency that is well below the zero line starts to go back up toward the zero line, the currency pair indicated is likely making a strong directional countermove
3) Time period correlations – When the shorter time periods indicate the same thing as the longer time periods the timing is right for more of the same directional price movement
Tell Us Your Ideas
How would you use the Forex Climate to generate winning trade ideas? Please use the contact box below to tell us your strategy. The best strategy submitted by May 30th will win a free lifetime subscription to Forex Climate!