How to Pick the #Best #Pairs to #Trade in #Forex - FX Index Analysis

FX trading is hard at the best of times! Retail traders have a shocking failure rate which is reported to be around 90%. Why is this? The main reason new forex traders blow their accounts is lack of understanding about leverage and volatility but this is controllable using risk management tools

(such as the FX AlgoTrader Risk Controller https://www.fxalgotrader.com/Products/Risk-Management/MetaTrader-Forex-Risk-Controller.html)...

However, once you understand how to manage risk you need to be able to chose the best pairs to trade which will statistically be the most likely to achieve your profit target...

How would you do this you may ask? Well the FX market moves based on flow... so if you can identify where the money flows are and in what direction the flow is going you stand a pretty good chance of winning your trades providing you align your trade in the same direction as the money flow. You could use a support and resistance based Market Flow indicator (such as FX AlgoTrader Market Flow product - https://www.fxalgotrader.com/Products/Analysis-Tools/MetaTrader-Market-Flow-Indicator.html) but you would need to analyse every chart you trade...

An easier, quicker and arguably more powerful approach would be to use a macro level analysis tool which analysed currency index data... this is exactly what the FX AlgoTrader Index Analyzer does...

In a nutshell, it sucks real time index data off a web server and delivers it to a client side Java application on your desktop/local machine. Currencies are ranked by timeframe in terms of their strength and weakness - the best pair(s) to trade will be the weakest and strongest currencies. On some says you may see USD strength across all timeframes and EUR weakness across all timeframes... so if you see a situation where the USD is the strongest currency and the EUR is the weakest... across the board.. what would you do? You would short EURUSD ie sell EURUSD... this would align your trading decision with the overarching flow of the market... ergo.. you're trading with the trend and statistically you have a MUCH higher chance of a profitable outcome...

So using a macro level index based approach takes all the guess work out of pair selection in forex trading... there's obviously more too it than this as optimum entry and exit levels would need to be thought about based on support and resistance levels... (pivots, price derived support and resistance levels etc etc)...

BUT... ultimately, if you can see where the big money flows are... and you can see which CURRENCIES are strongest and weakest.. you can make a FAR better pair selection decision when compared to a multi chart top down analyst... by the time they've done their analysis... their data is out of date! The index based approach is real time.. ALWAYS....

For more information please contact info@fxalgotrader.com

Product is available here:-
https://www.fxalgotrader.com/Products/Generic/Currency-Index-Analyzer.html

Website: www.fxalgotrader.com
Email: info@fxalgotrader.com

#best #forex #pairs #trade

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