Strategy Video: Measuring Conviction in S&P 500, USDollar, EURUSD
• 'Conviction' determines whether trends accelerate, hold, stall or reverse
• There are a number of ways to measure the market's commitment to move: volume, open interest, etc
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Conviction tells us whether a market will charge ahead with an existing trend or at imminent risk of stall or reversal. Yet, some do not separate current price action from commitment or struggle with its implementation. In today's Strategy Video, we discuss why we should establish the market's dedication to a developing move and how it can define our trading approach. We also look at a number of ways to measure this degree of sentiment using the S&P 500, USDollar, high-yield and Emerging Market assets, EURUSD and USDJPY as examples.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.