Forex Ranking, Rating And Score For October 2016
Forex Technical Analyst Trader | Oct 03, 2016 04:48PM ET
When looking at the Top 10 in the Monthly Ranking and Rating list we can see that for the coming month the following stronger currencies are well represented for going long: JPY(4X) followed by the NZD(3X). The weaker currencies are the GBP(5X) followed by the CAD(2X) and the EUR(2X).
A nice combination for coming month may be e.g:
- GBP/JPY with the EUR/NZD
- GBP/NZD with the EUR/JPY
- CAD/JPY with the GBP/NZD
- NZD/CAD with the EUR/JPY
Some of the pairs in the Top 10 comply for a longer term trade based on the Technical Analysis (TA) of the Weekly and Monthly chart. For the coming month these seem to be: GBP/JPY, GBP/NZD, CAD/JPY, EUR/JPY, GBP/USD and NZD/CAD.
These are just a few examples and many other combinations are possible. The mentioned pair combinations can be traded at the same time according to the rules of the FxTaTrader strategy because these are all different currencies. Generally speaking, by not trading the same currency in the same direction more than once in the same Time Frame you may have better chances with lower risk. In any case it always seems better to spread risk and this can be done in many different ways.
When trading with more than 2 micro lots it is a good idea to have a diversification and depending on your bias it may offer opportunities by going long or short on a specific currency trading it against other currencies.
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Ranking and Rating list
Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every month the Forex ranking rating list will be prepared around the change of the month. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.
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For analyzing the best pairs to trade looking from a longer term perspective the last 12 months Currency Classification can be used in support.
This was updated on 30 September 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Average: AUD, CHF. The preferred range is from 4 to 5.
Weak: EUR, GBP, CAD. The preferred range is from 1 to 3.
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When comparing the 12 months Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy these pairs are not traded because these would be traded in the Daily chart or in a lower Time Frame. Nevertheless they may offer good chances for the short term trader.
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Currency Score Chart
The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is my analysis on the 8 major currencies based on the technical analysis charts using the MACD and Ichimoku indicator on 3 Time Frames: the Monthly, Weekly and Daily. The result of the technical analysis is the screenshot here below.
When comparing the 12 months Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail. Currencies with a high deviation seem less interesting to trade because they are less predictable. There are no currencies at the moment with a high deviation.
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Besides this article I also use the Forex "Strength and Comparison" which is also available once a month on my blog at FxTaTrader.com. In that article we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Monthly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.
It is recommended to read the page Models in practice for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming month.
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