Which Side Is Pound On? 2


Salve a tutti,

this time I want to show you how the PotenzaFX indicators set can help you understand what’s happening in the Forex market.

In the post about currencies correlations we divided the 8 major currencies in 3 groups.

The first one is the one directly correlated to the stock market (AUD, EUR, NZD). The second is the one inversely correlated to the stock market (USD and JPY). And a third directly correlated to commodities (CHF with Gold and CAD with Oil).

We said that lately GBP was in between Group 1 and Group 2. We noted that the GBP was starting to “move” from Group 1 to Group 2. What we’ve seen in the last few days is that the GBP can now be considered part of Group 2.

What that practically means is that we should stop trading:

  • GBPUSD
  • GBPJPY

as GBP and JPY/USD are now directly correlated. While we should start taking a look at:

  • GBPAUD
  • EURGBP
  • GBPNZD

as GBP and AUD/EUR/NZD are now inversely correlated.

The interesting thing is that this “relocation” preceded the UK decision to leave European Union by itself  to solve their economic/political problems.

Maybe Mr. Cameron uses PotenzaFX to take his decisions 😀

In reality, what’s important is to know how those choices impact our currency trading.

There are people that say that the Market already knows what’s going to happen and that “news” are already IN the price when they are released.

Well, it may be so. What’s sure is that PotenzaFX was showing that well before it was clear to everyone. Also, we don’t know for how long the GBP will continue to act like that and if and when it’ll come back to be part of Group 1.

But, again, PotenzaFX will surely tell us 😉


Leave a comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

2 thoughts on “Which Side Is Pound On?

  • Todd

    Thanks for the inside. These tools are very good. This week I am doing great. Last week I struggled only because I wanted to play not realizing how to use them at best, yet this week so far I am back and head of the game. Only on demo for now till after the holidays. I am trying to get my groove going and trying my own stratigy useing your indicators so it is kind of my own system. Hope you don’t mind.
    Pip On
    Todd

    • Andrea Post author

      You’re doing the right way.
      First practice with them and only when you’re confident and comfortable in using them start trading live.
      A step at the time. Forex is always there and there will always be pips ready to be taken. You aren’t missing anything :)
      Wait to know more about the way you mix my indicators with your strategy.
      Cheers,
      Andrea