Updated: Aug 1
Currency Strength Meter Trade Idea Recap
Towards the end of April was a unique time for most CHF trading pairs, around this period there was a huge strength score of 36 in favor of the CHF on the currency strength meter. Showing the underlying intrinsic value of Switzerland was strengthening. This was the complete opposite for EUR showing a negative score of -27.
Heading to to the price chart of EUR/CHF we now have that short bias for the currency pair. As we can see the price itself has been on a bullish run since the start of April, however, we're expecting a drop soon. This is the perfect area for sell orders as the price is dear compared to the value it should be. The daily trend line is an extra confirmation on the bias. What we do now with the short bias of the asset is wait for a technical confirmation. If there is none then the bias is no longer viable and you're better off saving your capital.
What happened around mid May was what we were expecting. The trend line itself has been used as an area of resistance showing daily and 4HR lower lows. After the 2nd Lower Low we have our GO button. If you're extra patient you could wait for a retrace in the pair and it since dropped over 200 pips/ basis points.
In the next few examples I won't be going over the steps required for the next few examples as it's quite simple. I'll outline them below.
Currency strength meter Trading Steps:
Get your currency direction bias from currency strength meter for high probability trades.
Wait on technical confirmation and entry from your preferred technical methods.
Setup relevant SL and TP levels.
If confirmed by Technical analysis feel free to setup the trade, if no confirmation signals are made, the trade is much higher risk and I personally prefer to remove it from the watch-list.
Final step manage your risk/ trade as the currency strength meter scores can fluctuate with the goal of capital preservation in mind.
GBPCHF Trade Idea Before
GBPCHF Trade Idea After
NZDUSD Trade Idea Before
NZDUSD Trade Idea After
AUDCAD Trade Idea Before
AUDCAD Trade Idea After