The Disciplined Trader

'Market and Human' Psychology perspectives with tips on how to avoid common mistakes by Pierre Charlebois, Senior Trading Coach at www.TradingPostFinancial.com

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How to read and use the USD Index

Posted on March 23, 2009 at 12:14 in Uncategorized by Pierre Charlebois

The index is just what the name implies in that it is like any other index that uses multiple currencies/securities in order to establish an average to create a value. It is measured against six other currencies. Click here to learn more. http://en.wikipedia.org/wiki/US_Dollar_Index

1. I use it to help guide my view on whether the USD is likely to to strengthen or weaken. I don’t trade it specifically (although there may be some ETF’s available).

2. Some chart providers provide a feed so you can view it. But it is an option that not all providers have.

3. I use the same technical analysis as I would on anything I trade.

4. This helps in trading against all pairs where the counter currency is the USD. Such as EUR/USD, GBP/USD, USD/CAD.

Cheers

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