Lesson 2

Question 1

What do we trade on Forex?

Answer 1

1 currency vs another currency.

Question 2

What does a forex pair look at?

Answer 2

The strength of 1 currency vs the strength of another currency.

Question 3

What are the characteristics of a pair that should be trade?

Answer 3

You want a pair with a weak and strong currency, as this will give you a trending market.

If both pairs are weak, or both pairs are strong, the market will consolidate.

Question 4

What’s the correlation between EURUSD and DXY?

Answer 4

The 2 move inversely. If the dollar is strong, the Euro is weaker, so DXY should go up, and EURUSD should go down.

Question 5

How can the correlation between EURUSD and DXY help your analysis?

Answer 5

It helps determine directional bias.

Question 6

How do you find the right pairs to trade?

Answer 6

Look at the futures to determine bias of individual currencies. Find a strong currency and weak currency, and trade that pair.