Quick Intermarket Checklist Before Taking An Entry
Here is a quick guide of the various intermarket checks you should perform before taking an entry.
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We have a question here from Asanka asking how he can do a very quick intermarket check or intermarket analysis before taking any entry.
It's a very useful and important one because it is something that we do ourselves before most of the injuries that we take just doing a quick spot-check and cross-check, you know across the wires for different asset classes.
Now, the first step obviously, before you take any injury would be to do your fundamental, your sentimental, your technical analysis to make sure that you are trading in line with those three elements.
And once Of course, you've established that particular direction or that particular bias that you want to trade in, you will of course, have a trade plan that you want to trade in line with that particular bias. And depending on the type of trade that you take, you will want to do a just quick cross-check or spot-check across the main macro markets to make sure and that the coast clear, so to speak for that particular trade.
So for example, if you wanted to trade something like the Pound versus the US dollar, and then you would want to take a quick look at something like the Euro-Dollar, seeing where that is tracking, seeing where the dollar index itself was tracking, seeing where something like the Euro-Pound is tracking as well. And just to make sure that you're trading in line with any type of cross-flows, due to some liquidity cross-flows between something like the Euro-Pound and how that might affect something like the euro and the pound individually.
If you're trading something like the Aussie dollar for example, you would want to have a quick gauge and scout over to the equity markets to see where they are trading, and as a high beta currency obviously, it's very strongly correlated to something like the equity markets.
That goes for something like a high betas, the Japanese Yen as well. Or let's say you're trading something like equities itself, you would want to take a very quick look over again to your high betas or your risk sensitive currency pays, and seeing where they are tracking. looking over to your bond yield seeing they are tracking throughout the session, you know, or they are moving in line of that particular bias that you have for equities. And if they aren't, you need to make sure that you're aware of all the potential risk factors that can go into that particular trade.
If you're trading in line with a particular risk zone for the day, so let's you trading risk on a risk often, you would want to keep a very close eye on all the corresponding markets. you know, so keeping a very close eye on those risk sensitive currency pays, unlike the Aussie-Yen, the Aussie-Swiss Kiwi-Yen, Kiwi-Swiss, making sure where they are tracking making sure where your global equity indexes are tracking, are they moving higher or down in line with that risk flows.
And what about your risk sensitive commodities like oil, copper, how are they performing in the session again, looking over to bond yields, how are they performing?
So you know if you see for example, if you're trading something like the Aussie-Yen so let's say you wanna to trade the Aussie-Yen to the downside. Or let's say you wanna buy the Aussie yen right? But you look over to equities and you see that okay... The SMP is actually trading at a very, very, very significant resistance area or moving towards a very significant resistance area, then you might want to hold off on that particular trade because you might see the market find some resistance in equities, which can of course negatively affect your Aussie trade, as well.
So it's always just a good idea to do a quick spot-check and cross-check across the various asset classes like the major FX markets, like the major commodity markets, like the major equity markets, and like the major bond markets. And just making sure that you are aware of any potential risk factors from cross-asset flows or intermarket flows before you choose to pull the trigger that can pose a potential threat for that entry.
So hope that helps Asanka and any other questions, don't hesitate to let us know.
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If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://bit.ly/2HFykNd
-----
We have a question here from Asanka asking how he can do a very quick intermarket check or intermarket analysis before taking any entry.
It's a very useful and important one because it is something that we do ourselves before most of the injuries that we take just doing a quick spot-check and cross-check, you know across the wires for different asset classes.
Now, the first step obviously, before you take any injury would be to do your fundamental, your sentimental, your technical analysis to make sure that you are trading in line with those three elements.
And once Of course, you've established that particular direction or that particular bias that you want to trade in, you will of course, have a trade plan that you want to trade in line with that particular bias. And depending on the type of trade that you take, you will want to do a just quick cross-check or spot-check across the main macro markets to make sure and that the coast clear, so to speak for that particular trade.
So for example, if you wanted to trade something like the Pound versus the US dollar, and then you would want to take a quick look at something like the Euro-Dollar, seeing where that is tracking, seeing where the dollar index itself was tracking, seeing where something like the Euro-Pound is tracking as well. And just to make sure that you're trading in line with any type of cross-flows, due to some liquidity cross-flows between something like the Euro-Pound and how that might affect something like the euro and the pound individually.
If you're trading something like the Aussie dollar for example, you would want to have a quick gauge and scout over to the equity markets to see where they are trading, and as a high beta currency obviously, it's very strongly correlated to something like the equity markets.
That goes for something like a high betas, the Japanese Yen as well. Or let's say you're trading something like equities itself, you would want to take a very quick look over again to your high betas or your risk sensitive currency pays, and seeing where they are tracking. looking over to your bond yield seeing they are tracking throughout the session, you know, or they are moving in line of that particular bias that you have for equities. And if they aren't, you need to make sure that you're aware of all the potential risk factors that can go into that particular trade.
If you're trading in line with a particular risk zone for the day, so let's you trading risk on a risk often, you would want to keep a very close eye on all the corresponding markets. you know, so keeping a very close eye on those risk sensitive currency pays, unlike the Aussie-Yen, the Aussie-Swiss Kiwi-Yen, Kiwi-Swiss, making sure where they are tracking making sure where your global equity indexes are tracking, are they moving higher or down in line with that risk flows.
And what about your risk sensitive commodities like oil, copper, how are they performing in the session again, looking over to bond yields, how are they performing?
So you know if you see for example, if you're trading something like the Aussie-Yen so let's say you wanna to trade the Aussie-Yen to the downside. Or let's say you wanna buy the Aussie yen right? But you look over to equities and you see that okay... The SMP is actually trading at a very, very, very significant resistance area or moving towards a very significant resistance area, then you might want to hold off on that particular trade because you might see the market find some resistance in equities, which can of course negatively affect your Aussie trade, as well.
So it's always just a good idea to do a quick spot-check and cross-check across the various asset classes like the major FX markets, like the major commodity markets, like the major equity markets, and like the major bond markets. And just making sure that you are aware of any potential risk factors from cross-asset flows or intermarket flows before you choose to pull the trigger that can pose a potential threat for that entry.
So hope that helps Asanka and any other questions, don't hesitate to let us know.
-----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
