Once of the key concepts to understand as a forex trader is that of sentiment to a currency, and whether that sentiment is universal across the complex. In this video we explain the principles of the Quantum currency array and in particular using the yen complex. Here we can see we have diversity on the yen, with some pairs rising and some falling, so sentiment to the yen is currently mixed with both buying and selling in this time frame.
However, when we move to consider the British pound which is the most bearish in the yen complex, here we can see why. The GBP is being universally sold across the complex, and as such with any trading opportunities, offers a lower risk proposition as we are trading with the market universally. In other words everyone is selling the GBP, so we are simply joining the current sentiment which is across the GBP complex and so the risk is lower. There is nothing wrong with trading against the universal flow, in other words counter trend trading, but this carries a higher risk as we are trading in one direction, whilst the remainder of the market is trading in the opposite direction. This is fine, as long as we understand the risks, and more importantly understand this is what we are doing. Many forex traders don’t as they only ever consider the one chart associated with their chosen pair.