In today forex faq, we have a question from one of our fellow traders who has experience in trading index for about 2 years.
Below is his question:
“I have been trading indexes for 2 years and also just started currencies a month ago (particularly usdjpn, usdchf, audusd, eurusd and gbpusd).
To trade them I always have the DOLLAR INDEX as the guide. so if the dollar index is trending up, i would buy the dollars versus its currencies and likewise I would sell on the currencies versus the dollars. And visa versa for a down trend.
So far its been benefiting. but since I am knew with forex, I would like to have this theory confirmed.
Personally I find the US dollar index more related to the USDCHF pair. In fact, when the index is trending up, you will most probably see the USDCHF moving in alignment to it.
As for the other pair, I find them not so much in alignment as compared to the USDCHF. When I am trading the USDCHF, I will usually check the dollar index as part of my trading analysis.
Below is another question from our fellow traders
How do moving average work?
I must say that the moving average is one indicator that I never leave behind in any chart. This is because the moving average has many uses and can be integrated into many different strategies.
You can take a look at my posts on the following area
I hope that this information is useful for your trading and do give your say by commenting below.