Watch the webinar below!

• How to read a currency pairs page 
• How to understand market sentiment 
• Key charts to understand when comparing currency pairs

Speaker: 

Brad Alexander is an industry veteran who started trading the currency markets long before the advent of online trading. He owns FX Large Limited, which is dedicated to the provision of content for the forex industry; his clients include fintech companies, educators, and, of course, Valutrades. Brad is a self-confessed forex platform junkie who has worked with and created how-to content for most trading platforms, including MT4 and MT5.

Transcript:

[00:07]

Hey, Valutraders. Good afternoon, good morning, and good evening, wherever you happen to be. And welcome to our webinar on analyzing a currency pair. Well, what does that mean? Basically, we're looking at analyzing forex indices—metals in pairs—not just individual currencies or elements. We need to think in pairs.

So, I'm going to be going through a lot of very basic stuff and working our way up to some more advanced techniques on analyzing currency pairs. And of course, a great surprise from Valutrades: We're going to be introducing a really cool new feature that will cover about 100 different symbols. So, stay tuned in this webinar. Carry on, though, and you'll be really amazed at what we have to show you.

If some of the information in the beginning seems a bit basic to you, don't worry; it's going to be getting a lot more interesting and a lot more advanced as we go through the webinar. Thanks a lot.

[00:58]

My name is Brad Alexander. Most of you hopefully know me from various webinars with Valutrades. I've worked for Valutrades for many years, and I do the Market Blast every Monday and Tuesday. So, hopefully, that's been getting more popular. We have thousands of subscribers now, and we get a lot of views every Monday and Tuesday. So, thank you very much if you're one of those viewers who watches it and makes comments and hopefully makes a profit on your trading. That's what we're here for.

Right, so, I’m basically, I've been a trader for many, many years. I used to trade the Besada. Luis can look that up—he probably knows what that is. Not the Yoshkudo—just the Besada—years and years ago. I've been doing this for a long time. My basic function today is to create content for brokers, for fintech companies, and Valutrades is my favorite client. I'm not just saying that—it's absolutely true.

So, tune in and catch us on Mondays and Tuesdays with the Market Blast. And, of course, we need to go through the disclaimer. Please take a look at the disclaimers and risk warning on the Valutrades website.

[02:00]

If you're not sure about investing real money before you get going, please be careful. You can always jump on the chat line with Valutrades. They're very helpful and they're interested that you actually make a profit. And follow along with our lessons. You’ve got lots and lots of lessons on YouTube. We have educational seminars. And be careful because CFDs and FX are leveraged products, and your capital may be at risk.

So, what are we going to be talking about today? We called it analyzing a currency pair. What I need you to do—even if you're not a beginning trader; even if you're an intermediate trader—I want you to start thinking in pairs. That sounds pretty basic, doesn't it? But you'd be surprised how many people don't think in pairs, especially when you're trading currencies; it's a binary function. And even if you're trading indices, you need to be thinking in pairs. And I'm going to explain what that means in a couple of minutes.

Another way to take a look at currency pairs is with trader sentiment. We did a trader sentiment webinar a few months ago, so I won't go through every little detail of it.

[03:06]

I'll go through a few slides to just refresh everybody's memory. If you want to know more about trader sentiment, again, Valutrades has some very good information on their website, and the customer service people can help you. And there's another webinar on demand on trader sentiment, and there's also the same thing. We have two webinars on Valutrade signals.

If you're the type who doesn't want to be spending lots of time—and a lot of people can't—analyzing currency pairs and analyzing the markets, you can use Valutrades signals. And that's a valid way to trade. There's nothing wrong with that if you don't have the time to follow the lessons I'm going to give you in this webinar.

Right, MT4 profiles—if you watch my Market Blast videos Mondays and Tuesdays, you'll notice that I use profiles quite a lot. And to me, this is the most valuable tool—up until now, the most valuable tool. And I'm going to show you what these profiles can do for you, how you can do a strong-weak analysis. And if we have time in this webinar, I'll show you how to actually set one up.

[04:08]

They're very easy on MT4. OK, Valutrades—and this is the surprise I was talking about earlier in our last video: Valutrades has developed what they call a currency pair page. In fact, it's about 100 pages looking at various different currencies and symbols, indices, etc. And I'm going to be going through that to show you exactly what it is—and I must say it's quite awesome.

There's a lot of information and a lot of helpful stuff on these pages, but you'll have to bear with me and get through this webinar because I'm going to leave that until near the end. Sorry about that. But the fun bits are going to come near the end of this webinar, and I'm going to end the webinar in what I call the order of analysis.

I have a very specific—when I'm trading professionally or for myself—I have a very specific order that I go in before I actually push the button, pull the trigger, open a position. So, no matter what you do, no matter how you trade—whether it's through fundamental analysis, through signals, through the new Valutrades currency page—there's still what I call an order of analysis.

[05:11]

And I'm going to be showing you what that is near the end of the video, near the end of the webinar. OK?

When I say thinking in pairs, I mean that literally. I found some slides that I did for some students I did many years ago. I was asked to teach a bunch of software developers who work in the financial services market the basics of the market, and I found these slides that I did. And again, you may already be quite familiar with thinking in pairs, but I'm going to go through this anyway, so bear with me if this is below your pay grade.

So, every day we go out and buy stuff. We go to the supermarket and buy a tube of toothpaste, or we go buy a car. But we don't think in pairs. We think of the money we save; we think of the money in our wallet; we think of what's coming off our credit card. But if you think in pairs, we are actually buying in pairs. If you buy a T-shirt in Miami, you're buying a T-shirt versus U.S. dollar. If you're buying a car in Australia, you're buying a car versus Australian dollar.

[06:12]

So, you're actually working in pairs. If you're living in that country, earning a salary in U.S. dollars, or pounds, or whatever, you probably don't need to think in pairs. But traders do. I do all the time, believe it or not. If I'm buying a tube of toothpaste, I know the price can fluctuate, not only the cost of the toothpaste but also the cost of the currency. So, we need to be thinking in pairs all the time.

So, if you want to buy some vodka in Russia, you're actually buying vodka versus ruble. And we know right now that the ruble is a bit of a roller-coaster ride. So, I'm sure the price of vodka is fluctuating in Russia right now.

In Japan, for example, buying sushi in Japanese yen again sounds pretty basic, but it's a pair, and you need to think in pairs all the time, no matter what you're doing. So, every transaction we make is a pair. It doesn't matter if you're trading oil or trading gold–which I'm going to be beating that drum all through this webinar about trading gold or especially forex pairs. So, if we think—consider—everything as a pair, one of the most important ways to think of - to consider a pair - is gold because we trade gold typically against the U.S. dollar.

[07:15]

So, very often, people say, “Well, what's the value of gold?” Well, it's not just the value of gold. As we know, gold fluctuates with geopolitical events—very little in supply and demand unless the governments are buying a lot of gold. But it also fluctuates with the price of the value of the U.S. dollar. So, I'll go through that in great detail later.

We're looking at oil. Oil again is also bought and sold in U.S. dollars. It's important to understand that when the U.S. dollar changes/fluctuates, so does the price of oil. You're trading stocks; you're generally buying. If you're buying on the indices, like Apple I've got here, you're paying for it in U.S. dollars by the share.

So, we've got basic pairs that we're used to, and I know this is very basic to probably all of you, but let's go through it anyway. So, we've got pairs that we're looking at: Euro/dollar, pound/dollar. We call that cable/dollar. CAD, we call loony. I had a broker once telling me that it was called loony because it fluctuates so much. No, it's not. I'm Canadian, and our dollar coin has a loon on it.

[08:19]

It's a bird, so it's called a loony, dollar/yen, pound/yen—we actually call that guppy—sometimes Euro/yen. As you know, there are myriad different pairs that we look at.

So, again, I'm going to keep saying this word: pairs, pairs, pairs. So, we basically look at the forex majors as the hub of all the foreign exchange. And the forex majors are those basically that are paired with the U.S. dollar. And very quickly, you need to understand as well.

I want to go through my MT4 profiles, which is the quote currency and which is the base currency. But we'll go through that in a few minutes.

Basically, the forex market hinges around the U.S. dollar. So, for example, if you're trading New Zealand dollar versus U.S. dollar, that's one step in one transaction. But if you're trading Canadian dollar versus yen, then there's a conversion there in the middle. So that's why, sometimes, the spreads are quite high, or higher, I should say. Valutrades has amazing spreads. If you look at Euro dollar, very often gold, for example, is very often seven or $0.08, which is the lowest I've seen in the industry for years and years.

[09:29]

Any pair that does not have a U.S. dollar in it is called a cross, so Euro/Swiss, for example, Euro/pound, is a cross. OK? We have Japanese yen crosses. And you notice that the Japanese yen is always a quote currency pound cross. And we have a lot of other different exotic crosses. So, again, I'm drilling this home: You need to be thinking in pairs, whether it's Australian dollar versus Swiss franc or a tube of toothpaste versus the pounds that are in your pocket. Always, always think in pairs because it's a bilateral arrangement—when one goes up, the other one can go down.

[10:10]

I mentioned earlier about gold. This is really, really important. You need to be very aware about thinking in pairs as gold, and I'm going to repeat what I just said: Gold doesn't fluctuate because gold fluctuates; it fluctuates very often because its quote currency is the U.S. dollar, so I've actually made some pretty good trades.

My bread-and-butter trade is news trading, and I will trade off the back of the nonfarm payrolls and American CPI or retail sales, and I look for counter-trend trades. You probably heard me say that phrase many many times, and very often, I will find that there are no suitable trades against the U.S. majors like the euro or the dollar/Swiss or dollar/yen, but I can make a really good trade on gold/dollar because it may be going in a different direction.

So, you should consider this pair, XAU/USD, as a pair, as another forex. So, I'm going to repeat: The price of gold doesn't just fluctuate because some central government is buying it or there's a war on. It's because, very often, the U.S. dollar decides to fluctuate.

[11:17]

It's also the same. This is normally with the FTSE 100—this is not necessarily part of the topic, but I wanted to bring this to your attention—in that the UK100, which is the U.K. index measuring the top 100 companies in the U.K., will actually fluctuate based on the pound.

The reason is that these companies, most of their income is actually foreign, so if they're getting an income in American dollars or Australian dollars or euros, and the price of the pound fluctuates, that affects their balance sheet. So, you very often find this as the pound goes up dramatically, the UK100 of the FTSE 100 can actually go down and vice versa, so that's another way to consider analyzing based on pairs.

[12:08]

As I said earlier on, on the Valutrades website, we have a thing called client trader sentiment. I'm going to be going—if you click on the menu bar—and I'm going to go to this very quickly because we have a webinar, an on-demand webinar, on the Valutrades YouTube page or on the actual webinar section of the website.

[12:28]

So, basically, go to the menu, click on “resources,” look for “tools,” and there's a thing called “trading sentiment.” And basically, what we do—we give you, I believe it's five or six different pairs, so Euro/dollar, gold, dollar/yen, pound/dollar, and Aussie/dollar. And this is the sentiment based on what current Valutraders have open positions. So, in this case—this is an old slide, so don't make any trades based on this—euro/dollar, for example, 62% of Valutrade traders are long. If you look at dollar/yen, only 22.5% are long.

So, you can actually use this as a guide. You may not want to base your trading decisions on this, but it's always good to have a confirmation when you're doing your technical or fundamental analysis. So, this is another good way to analyze at least these five pairs.

[13:28]

And these are the major ones with a lot of liquidity. Euro/dollar is the most traded pair on the planet Earth. I mean trillions go through this every day in terms of foreign exchange. Gold, obviously, dollar/yen, pound/dollar, and the Australian dollar versus U.S. dollar because these four are huge economies. Euros and the U.S. are the biggest economies outside of China. And, of course, gold—we all know about, is a very popular traded instrument.

So, take a look at the Valutrades trader sentiment. You might find it interesting. And watch the fluctuations that other Valutraders are doing with the long and short positions.

[14:11]

OK, we also have Valutrade signals, and again, we've done lots of other videos and webinars on Valutrade signals, so you can actually take a look and see what's going on there, but it's a completely valid way to trade because you have some serious—and they're good friends of mine—some serious experts behind the scenes creating these signals and broadcasting. So, when you're getting these, you're getting these from Society of Technical Analysts diploma holders. These are not just people throwing the darts at a dartboard.

[14:42]

So, again, go to Valutrades website, click on the menu, go to “resources,” go to “tools,” and then click on “free trading signals,” and yes, they are free; you don't need to have a certain amount of deposit in the Valutrades account. We trust—Valutrades trusts—you will come back to the account and enjoy Valutrades' fantastic spreads.

[15:05]

So, you can go to the Valutrades signals page, you can sign up for it, and you can start getting signals to your email straight away. You can see there's also a Telegram group where you can get signals as well.

[15:20]

There's a lot of information in a video on the Valutrades website as to what the signal is about and, basically, why should you care, and again, I mentioned earlier, some people don't have the time to be analyzing the markets. We’ve got so much going on in our lives; why not use the signal? It's a very valid way to trade.

[15:39]

OK, here's a signal live trader on the NASDAQ. It gives you the rationale that gives you the stop loss; it gives you the profit target; it gives you the confidence that the analyst or the systems have in it in this particular signal. And, as I said, you can also get it on mobile, so you don't have to be sitting in front of your desktop to get these signals.

[16:06]

Here's a typical chart you get with the signal. You can see on the right-hand side of the chart you've got a green and pink line. The blue line is where we would enter the trade and sell trade. In this case, the green is where you'd expect your profit target, and the pink is where you would expect to have your stop loss. So, if you look at this, you have your risk/reward ratio, so not only have the signal providers giving you some good opportunities, [but] they've also calculated risk for you.

[16:34]

OK, I talked earlier about using MT4 profiles, and again, this is my favorite way to analyze a pair. And the reason I use profiles is I like to put all the different currencies on one page. So, based on this page that says Australian dollar, I've got Aussie/dollar, I've got euro/dollar, I got Aussie/yen, I got Aussie/Swiss, I got Aussie/kiwi, I got Aussie/CAD, and I've got pound/Aussie. So, basically, when I take a look—and you may have seen these pages on the Market Blast video—almost every time I have these, I look at the overall picture of a certain currency.

So, if I look at this quickly—and again, considering Aussie/dollar, the Aussie versus U.S. dollar—Australian dollar is the base currency. So, when the chart goes up, that means the Australian dollar was getting stronger and vice versa. The one below that is euro/Aussie, so when that goes down, the Australian dollar is getting stronger.

So, if I looked at this, I would say, “Hey, there's something going on with the Australian dollar,” basically showing me strength right across the board. In fact, the bottom-right shows me where the pound is getting weaker and the Australian dollar is getting stronger, so I may want to consider the Australian dollar in my next trades.

[17:55]

Let's go on. I do this with every single currency pair, with every currency. So, basically, I go next to the New Zealand dollar. And again, I can see a couple of areas where it looks stronger, but overall, it's giving to be sort of a flat-feeling Aussie versus kiwi, kiwi versus CAD, pound versus kiwi. They're fairly flat, even though I've got some strength against the U.S. dollar. I've got some strength against the yen—and right now, the yen, spoiler alert, is the weakest currency—and I've got some strength against the Swiss franc.

[18:30]

And I carry on. Here's the biggie. This is the one that all analysts pay attention to, and that's the U.S. dollar. So, if you—by the way, these are four-hour charts—if you switch this to the daily chart—and at the end of this webinar, I'll go through and actually do some profile building, and we'll switch to the daily chart to see what they look like—you get a totally different picture.

So, when you're using MT4 profiles to gauge the strength of a currency—and I'm talking with a currency, not a currency pair—you need to be using the time frame that you're comfortable with. This is the four-hour chart, and it gives you a very good look over the last few days. So, if I look at this now, I can see, clearly, the euro/dollar. Clearly, the dollar was strong, and then, suddenly, in the last couple of days, just got weak again.

[19:19]

In fact, if I look right across the board, the American dollar has gone weak literally in the last two days. That doesn't mean it's weak overall, and I'll show you in a few minutes on an actual MT4 profile, and I'll show how to change time frames and what we look at. So, I'm going through and I'm checking all my different currencies. I could say that, yes, the American dollar is getting weaker but only in the last couple of days, so I need to be very careful as to what sort of trade that I place on that.

[19:48]

Here we have the pound, and it's pretty much mixed. I mean, we know there are a lot of fundamental problems right now in the U.K., so the pound—it's going to be fluctuating a bit.

If I carry on to the yen, we also know the exact same—sorry, similar—problems in Japan, but they're more fiscal than fundamental. And the Japanese yen has been quite weak, so I would be very surprised to not see the yen looking very, very weak. And because the yen is the quote currency in all these charts, when the price action goes up, it means that the yen is getting weaker, so we may want to consider … And the reason I'm doing this—I'm going to go back in a second and take a look at all these.

[20:33]

Here we have the Swiss franc. It's been weak over the last couple of days but pretty much flat overall. It's strong against the Japanese yen, but everything is, isn't it?

[20:45]

And finally, I go to the Canadian dollar. So, I've got strength against the yen, but everything else is sort of flat and maybe a bit of strength against the euro. So, now that I've done my analysis, I can actually back and do my strong against weak. So, if I look back at all these different profiles, and I could say, hand on heart, that the Australian dollar was the strongest currency and Japanese yen was the weakest currency. So, I may want to go straight there and go to Aussie/yen and take a look at a trade there. And I do this all the time.

[21:25]

I look because there's no point in saying, "Hey, maybe there's something good happening on pound/kiwi," and then you find out when you do your strong-weak analysis that you're dealing with two weak currencies. You really can't make any prediction based on where you think it might go. Or maybe they're two strong currencies.

You need to be able to analyze, and this is very, very important to be able to do a strong-weak analysis, so I've actually made some pretty good trades over the years just by simply doing this and then saying, "Hey, I found out that the Australian dollar is the strongest currency—not currency pair, currency—and the Japanese yen is the weakest, so I'm going to open up the Australian dollar/Japanese yen chart and see if there's an opportunity there."

Again you don't just place a trade based on that. You still have to go through your usual due diligence—support and resistance chart patterns, candle patterns, whatever fundamentals, whatever you do—but again, I'm spending a lot of time on this, but this is very, very important to get to know how to use MT4 profiles.

[22:31]

OK, so here's the surprise: Valutrades is creating what they call a pairs page. This, in particular, is an example of the euro/dollar. So, it's combining quite a few things.

Obviously, on the left, we've got a very simple order ticket. And it shows you basically what's been happening with the euro/dollar during the day. In this case, it's down 4.42%. It's got the bid price and the ask price, and if you'll notice that the bid price and ask price are the same. That's because Valutrades spreads say they, 0.0, are excellent. So, you'll be able to click on this and others, and buy or sell that particular currency after you've done your analysis.

[23:14]

OK, so what's that sexy half a donut in the middle? That is news analytics. It's basically a radial gauge, we call it. And where does this come from? The radial gauge is based on news analytics, and I have to—full confession here—I used to work for a couple of years in the news analytics business, so I've seen these donuts, and charts, and alerts a billion times and, believe me, they work.

So, the way this works: There is artificial intelligence, machine learning, very intelligent computers constantly looking for news on the euro, on the dollar, and on the euro/dollar, and it's able to weed out the bearish sentiment from the bullish sentiment. And it creates a radial gauge like this.

So, in this case, it’s saying that the media, the news, Twitter, Facebook, you name it—professional traders are 75% in favor of going long on euro/dollar, while 24.6% are in favor of going short. That's a very good sentiment indicator based on news analytics and artificial intelligence, and that's pretty cool. They've been doing this for years, and, over the years, the machines and machine learning builds up a way to look at things, and they can very carefully, very cleverly filter out what's not financial news.

[24:40]

And one of the beauties of forex is it is very difficult to say euro/dollar and not be talking about financial news. I mean, I've seen the same things with companies like Coca-Cola or Volkswagen, and you know, these machines could be looking for news on Coca-Cola or Volkswagen, but you could also pick up a lot of other stuff that simply does not have anything to do with financial markets. The beauty of the forex market in a repeat is that it's very difficult for the machines to get it wrong.

[25:10]

So, one of the ways I used to use this news analytics was the same way I use the profiles. Now don't just look at the euro/dollar and say, "Oh my God, I'm going long because news analytics says long is 75%." Take a look at all the other ones. And again, Valutrades, very soon, there will be about 100 pairs showing on a page like this. You will be able to spend 24 hours a day watching and studying the pairs page on the Valutrades website. I can't wait.

[25:39]

But don't just look at euro/dollar; look at Aussie or dollar/yen. Again, just like the profile page I showed you on MT4, you'll be able to take a look at these radial gauges and take a look and see what else is going on in terms of what the euro is doing. And the reason I'm saying this is actually—again, I'm going to repeat. Let's say you think, "OK, everybody's long—75%," but let's say you look at all the other euro pair gauges and they were the exact opposite. I'd be a bit wary.

So, this tool could be awesome in the hands of the right trader. So, once it's launched, we'll let you know. If you want to know more details on it, keep tuning in to our Market Blast videos on Mondays and Tuesdays, and as soon as we're getting closer, I'll be letting you know when we'll be launched. And I'll be actually using these on the Market Blast video, so I can't wait. So, I'll probably have a snippet. If you want to see any other information, webinars, topics on Market Blast, just send a note to the Valutrades customer service email.

[26:45]

Also on the pairs page, we will have the signals as well. So, here we have a signal in place. It's a sell limit, and if you don't know what a sell limit is, that can be explained in other videos, or sell limit buy limit, and sell stop and buy stop are detailed quite heavily in the signals webinars. And, of course, there are quite a few educational videos that we've done on this particular way of opening orders—like we just did one recently on the different types of entries and positions, the date the signals published, the target, and the confidence. So, it will all be there for you on one simple page.

So, just to recap: You got an order ticket that shows the spread in the price; you've got news analytics which will show you what's happening in the world—in the financial world with that particular pair; and on the right, you got the wonderful signals Valutrades provides you for free.

[27:46]

And down below, on every page, there will be a profile description of each pair, so in this case, a $0 represents the cost of the single euro in U.S. dollars because the European Union and the American dollar represent the largest global economies. This is often favored among traders, and that's actually true. The amount of liquidity in euro/dollar is much, much higher than everything else.

It also mentions inflation, recession, wars—and this is when we get into the fundamental analysis. We won't go into that too much on this particular webinar, but it'll all make sense when I show you my final slide.

[28:25]

On the pairs page, you'll have a chart showing you the volumes that are being traded and the pivot points, the resistance support, support, and resistance, and again, I cannot harp on how important it is to watch support and resistance trend lines and so forth. I have seen so many people make so many mistakes by selling too close to the line—sorry, buying too close to the line of resistance—and selling too close to a line of support because they got enthusiastic; they got a signal; they heard from their friend. You find out after you place the trade, oops, my price might—my position has hit the support and bounced back up, and I hit my stop loss. So these particular bits of information on the pivot points and the six levels of support and resistance are critical.

And again, I'm trading all the time; I'm doing analysis all the time; I'm constantly drawing support and resistance lines. You see my Market Blast videos; I don't stop drawing lines. Trend lines, resistance lines—these lay it out for you, so it will show you exactly where the next line of support is in the next line of resistance.

[29:36]
And again, I'm going to repeat, these are going to be launched very soon, and Valutrades tells me there will be about 100 pairs, so you can use your imagination as to what you'll be able to play with when that comes out. And keep an eye on the Market Blast videos, and we all be able to let you know when it's happening.

At the bottom of each page, there will be news reports, so especially things like gold, the American dollar will have news reports—news on every particular pair—and this will be important for things like indices when earnings reports come out. In fact, this week is a very, very important week for earnings reports from some of the biggest companies in the states and in Europe, though indices will be fluctuating, and you'll be able to follow this on the Valutrades pairs pages.

[30:30]

OK, this is what I'm talking about in terms of my order of analysis, and again, it doesn't matter how you analyze your pairs. I always, always, always follow this checklist. I don't just get into a trade because my friends enter there, I heard a rumor, or whatever. I make sure I know what's going on with each individual pair before you open a trade.

And the first thing I look at is fundamental analysis, and you'll notice that I look at the fundamental analysis on Mondays in the Market Blast videos, and I save the technical until Tuesdays. And the reason is that technicals, I'd like to have a day just for the market to settle down before I look at technicals.

Fundamentals are critical because I need to tell you, the trader—the Valutraders—what big news events are coming up because there's no point in opening a trade only to find out three hours later that U.S. retail sales came in way lower than expected, and your trade is blowing because you didn't understand that a news story was coming out.

So, it's important to keep in mind the fundamentals—especially these days with central banks struggling to keep inflation under control. They say they’re going to raise the interest rates to 2.25%, and then two days before, they change their minds to 0.5%, and you need to be keeping an eye on this because this will definitely impact the way you trade.

[31:59]

If you go short on euro/dollar, and then you find out that the European Central Bank's going to increase their interest rate by more than they thought, then that trade may be blown. You need to be really paying attention.

[32:08]

Next thing to look at is support and resistance. I just mentioned this in the previous slide. Always, always, always chart your support and resistance because support and resistance is the maximum and minimum that the market is willing to pay during a given time, and that is critically important. Chart patterns—again, if you watch my videos, you know I'm addicted to chart patterns. Chart patterns are the graphic representation of the mood of the market, so fundamental analysis in a bite-size, pretty-picture form.

[32:41]

Then I go on to indicators. I mean, I know people who just jump on trades based on fractals, or Bollinger Bands, or stochastic oscillators in MACD. I use those as a confirmation tool—not as something that gets me in the trade. I do the first three above that, then I look at the indicators. And again, if you know me, you know that my favorite indicator is the stochastic oscillator. I find it very, very, very valuable to look at candlestick patterns at the last. I don't jump and make a trade based on a morning star or a candle. It's great to have that confirmation that a reversal's coming up.

[33:21]

OK, what I'm going to do now—we've got a bit of time left—I'm going to go back to MT4, and it's on a screen over here. And what I'd like to do is show you basically how I set up a profile.

OK, so what I'm going to do is, if I click on “profiles” on MT4—give me a few seconds to make sure you're looking at the right screen. Always good to know I'm showing the right screen to my Valutraders. If I click on the “profiles” button, you will see here—it may be too small to see on your screen—I've got all the profiles that I showed you on those slides. I got Canadian dollar, U.S. dollar, pound, yen, Swiss franc, Aussie dollar, and kiwi dollar. And I've also got one for metals. If I click on “kiwi dollar,” I get exactly what my slide showed: all the Kiwi pairs sitting right here on one convenient screen.

[34:26]

If you're not familiar with how this works: If I click on - I can expand a chart, so now I'm looking at kiwi/dollar. If I click on the “tile” button, they all go back to where I started. Let's say, for example, I wanted—this is the Aussie/kiwi chart here, but I wanted it to be bigger. All I need to do is drag the Aussie/kiwi chart into the first four, click on the “tile” button, and now the Aussie/kiwi chart is basically sitting with the larger chart.

Mt4 is not very forgiving when it comes to arranging. You can actually arrange things manually, but once you click a button, it snaps back to where you left it.

[35:12]
So, basically, that is a profile of kiwi dollar. Let me go back; I promised you I would take a look at the U.S. dollar, so let's go back to U.S. dollar.

As I said, this is the four-hour chart, so I can change it very easily to daily charts, and you'll see the complexion of the trend changes dramatically. So, depending on the style of trading that you do will dictate how you analyze a pair. In this case, we're analyzing a currency, so, if I go to the daily chart, we can see a very, very different picture.

In fact, again, here we are: dollar/yen, it's a one-way street; pound/dollar, it's a one-way street; Kiwi dollar, Aussie dollar is also dropping dramatically. We've got a lot of fluctuation between the Australian—sorry, as far as the U.S. dollar and the Swiss franc. We got almost a one-way street basically with the euro, so when I change to the daily time frame, you can see the complexion of this profile changes as well. And if you could imagine, if I change the 15-minute time frame, it would be different as well.

So, what I'm looking for is consistency. I want to see basically all—almost all—my pairs going in the same direction before I can say the American dollar is weak or the American dollar is strong—some checking and changing, and now back to the four-hour chart.

[36:33]

OK, so the way that I make up a profile, it's really quite simple. Let's go back to our default, and there's always a default template or a profile on. So, what I'm going to do now is basically get rid of everything. And I guess you already know how to do this, so I apologize, but I was—there’s a lot of traders who asked me about templates; a lot of students are asking about templates and profiles.

So, let's say for example—so I've cleaned this totally—so I'm going to go now, and I'm going to save profile A, and, of course, the year up here. So, “save profile as,” and I'm going to call it U.S. Dollar 2—not to be confused with the one I already made.

[37:26]

OK, so basically, now I'm going to open up my MarketWatch, and I'm going to add charts. OK, there's dollar/Swiss. I can right-click on cable and add a chart window, right-click on euro/dollar chart window, so [it] will just take me literally seconds to create.

OK, so I've added a bunch of U.S. dollar pairs. I can click on the tile, and I've got six, so I'm missing one—anyway, not to worry. Let’s get rid of the MarketWatch. This is a profile now, and basically, it's opened up my charts with the default templates. I'll just get rid of all the ... so that is basically how we create a profile. It's really quite simple.

[38:17]

And again, I encourage you on your MT4 platforms to do this with all your currencies, and again, I'm using this not to analyze pairs. I'm using it to analyze the currencies themselves. So, here we have a whole bunch of charts. Say I wanted euro/dollar to be in the very beginning, so I get its attention—my attention, I should say—so I'll drag it over there, click, now I've got euro/dollar on the top left.

[38:41]
OK and I can also, now, if I want, I can actually drag in labels. OK, that seems like a tedious way to make a lot of profiles. Now, I'm going to show you that's the way to make the first profile. The second profile is much, much easier, so what I'm going to do—MT4, they always say they have auto-save; well, I don't always trust it, so before I go, I'm going to make sure I save this profile, U.S. dollar 2, so I know it's saved.

[39:26]

OK, so here's something else. We can do this. Go to “new,” and create another profile. And again, I created seven profiles, and now I'm going to look at the seven major currencies. Let's call this CAD 2. So, I'm looking at the Canadian dollar, and instead of doing what I did and dragging in, I can do something I really like. There's a trick I'm going to show you on MT4 that not many people know about MT4.

First of all, let's get rid of that. If you click on the date on the very bottom left corner—if you double-click on it—you can actually type in here. So, what we'll call this is Euro/CAD. And, voilà, it changes. Let's do this one down here. Let's call this CAD/Swiss. We have dollar/CAD over here, so we need to change that.

[40:22]

So, here we have the pound. So, let's say you make a mistake. I type in CAD/pound, which is a pair that doesn't exist. It rejects it, so you won't make a mistake. So, I'm going to type in GBP/CAD so I can make my pound/CAD.

So now, we have CAD/yen. And here we have Aussie/CAD. OK, and just for good measure, another way to do it is to—let's open MarketWatch—you can actually drag the currency onto the chart, and it will replace them. So, the one I'm missing actually is kiwi/CAD. See, this is it. Valutrades has so many pairs; I can't find it. Not a problem; let's just get rid of this. We're running out of time, so let's say I've got my euro/CAD, and I want to be in the very beginning—drag it to the front.

[41:30]

Oops, I've missed it. Sorry, I’ve got to add it to the front. Click, and now, I've got dollar/CAD on the top left corner—right where I want it. You don't have to do the text; I just do it. I'm just doing it for this lesson to be convenient.

OK, so that's how to set up a profile in MT4, and again, if you see my videos, I'm going through these profiles all the time. I never stop looking at the profiles. My templates are all set up. I've got profiles for U.S. indices. I've got profiles for metals, I've got profiles for Asian indices, etc., so it's very, very, very, very handy, and this webinar is about analyzing currency pairs, and for me, I can't analyze a pair unless I know what each individual currency is doing.

[42:35]

But the beauty of this is you don't necessarily need to do this if you don't want to because very soon, we're going to be producing our amazing Valutrades pair page.

[42:50]

OK, that's it. Again, keep an eye on your Valutrades emails. Keep an eye on the Market Blast videos, and we'll be telling you. And we’ll hopefully do a countdown as to when Valutrades will be launching these pair pages, and, trust me, they're going to be amazing. I've been using news analytics for many years, and it's very, very good, and the fact you can get it for free from Valutrades is a triple bonus.

Anyways, thank you very much for watching, and we'll see you guys soon. Happy Valutrading.