Potential trade coming up on EUR/CAD.
Notes: EUR -1, CAD +5, correlating sister pair is CAD/CHF , (CHF -2).
Price have surpassed a strong area of support which have now become resistance, expecting market to retrace to our potential entry for a short position. Target will be recent lows. SL: above entry. TS: 50 pips.
Dec 04: Currently awaiting pullback followed by a failure at expected entry.
Sister pairs move together, easy example is EUR/USD and USD/CHF. If you spot a long trade on EUR/USD, it is more then likely this will translate in a short trade on USD/CHF, so instead of making 50 pips on only EUR/USD you can simply add 50 pips by trading the correlating pair. However its important that the currency strength lines up on the sister pairs as well, if its lagging you want to stick to the leading pair. You would also want to look at sister pairs to understand a more ideal area of pullback or price halts. I hope this answers your question, let me know if you need further assistance :)
Merry Christmas !
Thank you for your clarification, it definitely clear some doubts.
So if EUR/USD is +5/-2, we will also want to find a sister pair that is more or less similar to EUR/USD? If USD/CHF is -2/+4, is it more or less similar? It means i can go long for EUR/USD and short for USD/CHF?
Do you mind explaining more about the lagging part? I also saw the checklists that you have created but i am not quite sure about point 11 (Update journal with target information). Do you mind providing me with more assistance? For the daily currency strength, do they fluctuate throughout the day or more or less it will stick to the strength that was tabulated?
Sorry for so many questions! I really like your posts on the currency strength and i am interested to find out more about how it works.
Merry Christmas and happy new year in advance!