Volatility, sentiment and the currency matrix all explained

Volatility can be both a good and a bad thing, but when the volatility indicator is triggered you can be sure of one thing – expect the price to congest within the spread of the candle, and possibly reverse in due course. And in today’s forex trading session on NinjaTrader, the GBP/JPY delivered some classic examples on the faster timeframes with the 30-minute timeframes trumping price action on the 3 minute. As always, viewing one chart in isolation is dangerous, which is why using multiple timeframes is so important since signals in a slower timeframe carry greater weight than those in a faster timeframe.

Focusing on the Japanese yen also brought the currency matrix indicator for NinjaTrader 7 into sharp focus, with two key points. First, the weakness in the GBP/JPY in terms of its ranking on the ladder, and second the meaning of the numerical ranking which can then signal whether a currency pair is reaching an overbought or oversold state on the index. Here we could see the GBP/JPY was an ‘outsider’ from the other yen pairs, and one in particular, the EUR/JPY delivered some solid trading opportunities.

About Anna 2016 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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