Trade a basket of currency pairs
You probably noticed that currency pairs move in certain dependence from each other. For example, when EURUSD goes up, USDCHF goes down. And when GBPUSD is growing, as a rule, it is followed and NZDUSD. All pairs with the yen (JPY) usually move in the same direction. Not every day, not every candle, but in General, trends exist. This is called correlation.
Highlighting certain "families" of currency pairs and their dependence on their uniting factor, for example the presence of Usd in the pair we can open up a unified position from all over the currency pairs and thereby to reduce risks by diversifying our position from the inside. This is called trade baskets of orders for different currency pairs.
The idea behind the Moving Average Distance Dashboard stems from the fact that every currency pair is made up of 2 currencies - the base and the quote currencies. Sound basic right A currency pair therefore moves because either (a) one of the 2 currencies is weak and the other strong or (b) one of the 2 currencies is very, very weak or very, very strong.
Therefore to benefit from price movement, we want to match and trade a strong currency against a weak one as trading 2 strong currencies or 2 weak currencies will not give us any mileage.
How Do We Identify the Strongest and Weakest Currencies
Each currency group has 7 currency pairs; and I will be looking for a group that is showing strength or weakness on at least 4 or more of the associated currency pairs - the more, the stronger or weaker. See this live example taken around 9 pm PST (US/Canada)