How does an investor engage in determining the strength of a single?
In general, simple technical analysis can be used to determine the strength of a single currency, rather than a pair of currencies, which is a great way for novice traders to make trading profits.
People often talk about the relative strength of currencies.
The so-called relative strength here does not refer to the RSI index, but to the strength trend of the currency across the market.
By comparing the straight and the cross, we can find the strongest and weakest currencies.
The specific analysis method is not complicated, and it does not need to be analyzed every day.
Once every 3 or 4 trading days is enough.
Let’s think that.
Traders can open the Canadian Dollar/four hour chart the 200 moving average is used as a dividing line between strength and weakness.
The Canadian dollar is a strong performer among currency pairs when prices are above the 200 MA.
At this point, we mark an up arrow;
If the exchange rate price is below the 200 moving average, which indicates weakness, we mark a downward arrow.
We can get a clear conclusion by doing this for the other six crossover disks in turn.
The Canadian dollar weakened against seven other major currencies and received seven downward arrows.
This is also consistent with basic principles.
As lowered expectations and a slowing global economy weigh on trends.
There are different ways to trade Canadian dollars.
Here’s a simple way to do it.
Traders can use these methods to find the strongest currency pairs in the foreign exchange market today.
For now, or, and then go short CAD/GBP, CAD/JPY or CAD/CHF.
However, it is important to note that this method can only determine the long-term trend of a currency, and the specific entry point and stop loss positioning should be adjusted according to the trader’s trading plan and strategy.
Another approach is to short the Canadian dollar basket, that is, to short the Canadian dollar in the main Canadian dollar currency pairs in the foreign exchange market.
The biggest advantage of this approach is that it spreads the risk of the position so that even if there is an emergency in one country or a black swan event in its economy, the overall trading of the trader will not be greatly affected.
Here lies the benefit of trading compared with foreign exchange trading in a single currency pair.
For example, CAD/JPY would rally strongly in the event of a sudden announcement of bearish JPY policy.
However, if you trade a basket of currencies, the trader’s overall trading results will not be greatly affected.
For the specific transaction mode of the package of currencies, traders can use the platform’s system for automatic trading, but also through manual operation.
For example, traders typically trade at $10,000, so we can adjust our positions to short $2,500 each of the four major currencies, the Canadian dollar.
This is how novice foreign exchange traders judge the strength of a single currency.
This method is simple and easy to use, but can be a good help for beginners.
Hawkish Fed and Omicron jockeyed for market position as U.S. crude oil opened down nearly 3 percent to hit a new two-week low.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
