The 3 Best Individual Strength Patterns. Thomas Yeomans

Transcription

1 The 3 Best Individual Strength Patterns. Thomas Yeomans

2 Hi. I am the creator of the Forex trading tool often called the Currency Strength Meter. Nowadays it is a chart. It all began eight years ago and has morphed from a spreadsheet I gave to students into the AccuStrength 2012 with its own unbiased data and features galore. The first meters I designed had changing numbers every second or two. The simple design allowed me to see current strength in real time without the hassle of opening a dozen pair charts but it lacked the ability to see what happened in the past. AccuStrength is truly a special product. It s a chart. The old style meter morphed into a special chart in 2009 with our 2. series and blossomed into a full feature charting package we have today. For those who don t know me, In January of 2010, after years of teaching Forex each morning to large crowds of eager students, I began the new year of 2010 with a vision of creating the best currency strength program in the world with its own unbiased data supply. I opened an office and pulled together a team dedicated to creating the most accurate currency strength tool possible using data feeds that would be prohibitive for any small trader.

3 While I worked the market each day in my open space office, I had brilliant developers of the highest caliber alongside me to design and fine-tune my every strength tool wish. Not only did we add history and trendline creation, we took the formula from my prior meters and rebuilt it from the ground up. All the while testing it during real time market conditions. The things I noticed were missing from my older meter designs were added along with a variety of exclusive abilities on my list of over five or more years of using currency strength forex. We designed a frequencies calculation in the new algorithm. (That was something I longed for in prior versions.)

4 The most important objective was getting rid of an individual brokers free data and obtain real forex bank feeds for the calculations. I needed Industrial level forex feeds that the brokers themselves use and an infrastructure to support it. By combining the top feeds and applying a comparative analysis program to see the trends among all the top data producers we were able to smooth out the massive amount of data and create recognizable patterns. I knew the old formula had a simple rate of change computation but I needed more consistency and a way to take into account the frequency of changes taking place among certain pair combinations. (Active currencies are exchanged more often.) I needed to count the amount of changes taking place during times of intense speculation along with measuring the rates of change taking place in prices. So, for my new strength machine, we tied into the big boy feeds and took calculations from forty-two pairs using ten of the majors. My previous strength meter/charts contained an adequate algorithm that worked with brokers who gave away their data. There are more than 300 brokers who can provide free data to the 244

5 software, but its manipulated by each broker which forms unique datasets for each broker. That engine takes a simple rate of change calculation and applies it among the available pairs that particular broker provides. The 244 is flexible enough to adjust to a variety of broker feeds with varying amounts of pairs, but there is a tradeoff. Of course the prices are manipulated in forex. Each broker deals with a bank and what they pay for ten million euros is quite different from what the heavily leveraged little player on their system pays. They have to add in their spread for one thing. ty The AccuStrength 4 became a marvel of modern programming and data delivery with features like the ability to save complex configurations for each of ten individual currencies. It has a history recall to the exact second for up to a week. AccuStrength has preset buttons placed on the bottom of the software to have instant access to your favorite timeframes. Pick any two brokers and you will find differences in prices constantly during heavy periods. This is the nature of having no central market price. Forex prices and the fills they provide you with are unique to each broker. You get a free Forex feed because the broker is not paying an exchange. They make their own data to distribute to their clients

6 The currency strength charting software is separate from your other charts or trading platform. Simply put, it measures the interactions among Forex prices and calculates strength for the individual currencies on a chart numbered one to nine. I have a short ebook on a universal method of trading with a currency strength chart that I call the ForexGrail method. It allows a person to get familiar with the way strength tools work and lets them pocket a few bucks at the same time. Who doesn t love that eh? Over the last 8 years there have been 3 patterns I have noticed happening all the time with a currency strength chart. Read First. You will have to change the way you think about Forex pairs and charts. Forex trading in its basic form is purchasing one currency using another. (Individuals) Foreign exchange is making deals using two individual currencies. You buy one currency and sell another. All forex trading is the exchange of one currency for another. For example, buying the common Forex pair called the EURUSD means that you will purchase Euros and pay for them using the US dollar. If you sell the EURUSD, you purchase US dollars while paying for the deal with Euros. All Forex trades consist of buying, then selling individuals.

7 Knowing the strength of an individual currency is difficult when you only see one pair price chart. In order to find out if the Euro is actually strong or not before buying it, you would have to open other pair price charts to see if this apparent strength increase is also seen with other combinations. In order to get an idea of how strong a currency is you would have to open at least 26 pair price charts. The currency strength charting software takes all the work out of it for you. It will measure all the pairs available to it and come up with a strength number that s charted on a graph. The price of the base currency is written on the side of the chart and the counter currency will point to it. Unlike a regular stock chart, there are two changing entities involved. EUR/USD The euro is the base and the USD is the counter currency. GBPUSD The Pound is the base and the USD is the counter. When you look at a candle display on a one hour price chart you are seeing the summary of price movement between two currencies over sixty minutes. The candle result has an open, close, high and low. A five minute pair chart is capable of showing several days at one time because of the time segments.

8 Currency strength charts on the other hand, display constantly using lines. Every few seconds a currency strength chart will update the graph and the line from left to right represents the amount of time that has passed and how prices have changed during that time. What you see are the results of constantly changing interactions among dozens of pairs. From the many years observing currency strengths there have been three common patterns on the strength chart. I have been able to profit from one of these three day after day and week in and out. NOTE: These consistencies can only be seen with chart type currency strength meters. The spreadsheet and tick by tick display types don t show you patterns since they change too frequently. In these examples below I am using the AccuStrength, ForexSnap, and the famous ForexGrail 2.44 for my examples. The picture above shows the currency strength chart beside a pair chart. What you see on the currency strength chart is not going to be interpreted like a regular price chart. Price charts display prices and currency strength charts graph the interactions and resultant forces. Strength chart software measures the rates of

9 change taking place between multiple pairs. How the individual currencies interact with their peers will determine strength.

10 1..Bounces An interesting and potentially profitable pattern is called The Bounce Rule: Don t buy after currency strength hits the 8 Rule: Don t sell a currency after it weakens below 2 The 8 and 2 are what I call bounce zones. After using a currency strength chart for a while you will begin to notice that currency strength will usually reach the number 8 on the strength chart and almost magically reverse. It s like a sine wave. There are times when it will go beyond the 8 bounce zone but a trader should be on the alert for a reverse in strength at any time after 8. On the same note I don t suggest selling a currency when the strength level 2 is hit. The bottom bounce area.

11 I suggest getting ready to place a sell on the currency that reaches a high of 8 since it has reached a currency force limit and is ready to fall back down. Buying after a currency has reached sustained a lot of pressure isn t a good idea. It would only have a limited strength left in it and the odds of it going back down are tremendous based on past behavior.

12 We see this sine wave shape constantly in currency strengths so just wait it out and the currency will begin weakening. That s the special time to place a sell. When it has reversed and began it descent to the 2 strength line area.

13 2..Crosses Big reactions occur when individual currency strengths cross each other. Trading the cross is fast paced and highly profitable. Rule: When a currency is approaching a cross point with another currency, be prepared for a large move. Seasoned strength pros use this method to take several positions a day using a variety of currency pairs to get maximum pips. Most cross trades only last a few minutes but produce huge gains when high leverage is used. You simply find two currencies beginning to converge. Crosses happen all the time between many currencies. You pick the two that interest you, and follow the simple instructions. That s all there is to it. The AccuStrength has alarms to alert you to trading opportunities using crosses. When the strength levels of two currencies come in close proximity to another, they begin to speed up. Once they have hit

14 the cross point, they react almost violently at times. The really great thing is that they do it almost every time. It s almost like nature kicks in. Currency strength hates to have two individuals sitting at neutral. Like magnets of the same polarity Above shows a pair chart and the 244 strength chart. The cross and resulting movement on the pair chart.

15

16

17 3..Anchors Trading Anchors is advanced but more accurate. Once I combined anchor areas on the currency strength chart with anchors on price charts, it created a massively successful trading method I have been using for several years. There is more about it in the movies section once you subscribe to AccuStrength or in the book that comes with the 2.44 meter.

18 Find a consistency and exploit it. Forex is all about trading strength against weakness.

19 INSTANTLY BEGIN WINNING TRADES Get a currency strength chart from Support [email protected]