Heatmap for the Majors Heatmap
Forex Heat Map Widget gives a quick overview of action in the currency markets. It lets you spot strong and weak currencies in real-time & how strong they are in relation to one another. This trading tool can help choose trading strategies, find opportunities and trade with confidence.
Heatmap explained in this Heatmap Tutorial
The heatmap is a trade entry management tool that graphically displays pockets of strength and weakness in individual currencies on the forex market in real time. Traders can use this tool to verify your trade entries. It also points you towards supplemental trades and pair movements that may not have been considered in the trade planning process or due to unexpected news and market sentiment. The Forex Heatmap also assists with assessing the risk of each trade entry.
Read this tutorial in its entirety to help with using the heatmap successfully.
The heatmap is a visual map of the market and is easy to interpret, even for new forex traders. It consolidates and summarizes a large amount of information and price data from 28 currency pairs into a visual map for quick trade decision making. It refreshes continuously in real-time for hands-free operation with traders in mind. The end user can easily scan and monitor all pairs in under two minutes to see what currencies are consistent and moving right now.
Fundamental Basis for The Heatmap
The Forex Heatmap is arranged by parallel and inverse currency pair groups. The eight major currency pair families: USD, CHF, EUR, JPY, GBP, AUD, CAD, and NZD pairs are each grouped together.
Traders can then easily read the pockets of individual strength and weakness within the individual currencies in real time. All traders should have expertise in parallel and inverse analysis before using this great tool, for a better understanding of why currency pairs move.
Forex Heatmap Features
You will be able to access the live heatmaps here. The Forex Heatmap updates in nearly real-time. The heatmap is on all of the time during the market hours from Sunday night until Friday afternoon. The heatmap works synergistic-ally with your trading plans and strategy. When the audible price alerts that we set in our trading plans hit in the main trading session or after the major news drivers, traders should look at the heatmap to verify all trade entries.
Using the Heatmap With Trading
Prior to using the Forex Heatmap, you should review this Forex tutorial
The Forex Heatmap is best used after the start of the London session and through the US sessions, which we refer to as the main trading session.
After significant news on the world economic news calendar check the heatmap to make sure your entry is validated, on pairs within the same parallel or inverse group.
If you get a signal on the EUR/JPY, you would buy this pair if the EUR is strong or the JPY weak or preferably both.
Once an individual currency takes a direction, trading signals on the heatmap may not change for several hours and possibly for up to 15 hours. The sentiment of the market and currency strength and or weakness drives the pair you are trading higher or lower. Each trade entry generally requires not more than about four or five inspections of the heatmap, making this tool is an incredible time saver.
Remember it doesn’t make a lot of sense to stare at the heatmap all day, this defeats the purpose of having it.
When checking the percentages, you are generally looking for all the percentages on one individually currency group to be greater than 0.25-0.30 % before considering taking a trade. When the Forex market is quiet, the pricing and percentage of movement on the red and green bars tends to bounce around in a small range and these movements don’t mean too much if all the percentages are lower than the 0.25-0.30% threshold. Movement less than this is not meaningful. It takes some getting used to.
After most of the news items and the Forex market momentum starts to hit in the main trading session, or after significant price alarm points in the form of a solid signals or other information, like after a strong economic news driver, then the configurations and percentages become very meaningful and can map out the market momentum clearly.
When all the percentages within one currency group exceed plus or minus 0.25 – 0.30% and are consistent, then you can start to watch those pairs for an entry in the main session.
if all the JPY pairs are green on the heatmap and all the percentages are 0.25-0.30% and look consistent the JPY is clearly weakening. If the AUD is strong you would see green bars on the pairs with the AUD on the left and red bars on a pair like the EUR/AUD, but once again all pairs would be consistently at 0.25-0.30%.
The EUR/AUD would be -minus 0.25-0.30% for AUD strength and the pairs with the AUD on the left like the AUD/USD or AUD/JPY would be +plus 0.25-0.30% for AUD strength.
Once again this takes some getting used to, but the logic is simple.
The heatmap also are also extremely useful in detecting currencies with consistent strength or weakness for possible trade entries.
Each currency pair has two separate currencies, here are two simple examples: If the GBP is strong and the CHF is weak – Buy the GBP/CHF, if the GBP is weak and the CHF is strong – Sell the GBP/CHF.
If both currencies are strong do not trade the GBP/CHF, or if both currencies are weak do not trade the GBP/CHF.
In this case move to another pair or currency group looking for individual currency strength or weakness. Transfer this logic to all currency pairs to manage your trade entries and begin to tap the full potential and all the pips in the spot Forex market today
The heatmap may also point you towards another pair that may not have been considered in the trading plans due to unexpected news outcome or change in market sentiment.
It also tells you when not to trade.
Before using The Forex Heatmap you should also know the direction of the primary trend of the currency pairs you are watching and considering for trades.
You should also know how to set price alarms at nearby support and resistance areas to monitor the market for movement in the main trading session, as well as the times of upcoming volatile news announcements from the Worldwide economic news calendar.
the most experienced traders use the heatmap to make extra pips in the Asian session after they become more comfortable with multiple time frame analysis.
Trends and the Heatmap
The Currencies Heatmap signals will occasionally suggest a buy or sell signal that is against the major trend on a specific pair. Sometimes currency pairs move against the trend after extended moves or after unexpected news and it is the job of the heatmap end user to know the direction of the primary trends. Knowing the direction of the trend of a pair is not difficult
If you are an experienced trader and you trade against the trend and you understand the risk and reward of doing this, extra pips are possible, but you would be trading more frequently.
Always trade with the trends of the currency market but the short-term movements can and will occur against the trend. This gives you a window of opportunity
When you check the heatmap always check the trend indicators. Become a good student of multiple time frame analysis and the heatmap becomes a powerful weapon.
Support and Resistance and The Heatmap
If the heatmap indicates an entry on a pair and there is no near-term support or resistance nearby, entry success rate and pip return go up substantially. However, if the heatmap indicates a buy or sell entry on a pair stuck in layers or clusters of support or resistance, then the pair could struggle with its movements.
So always look for pairs with no near-term support or resistance nearby or take the day off trading and go out to have some coffee.
A new movement or opportunity will likely come your way the very next day anyway.
When to Use the Heatmap
The currency Heatmap is primarily to be used in the European and American session (main session), this is when sustainable entries occur. However, it is possible to use the heatmap in the Asian session with some limitations and after you have about 6 months to 1 year of real money trading experience.
One year of experience watching the JPY, NZD, and AUD pairs and Asian session news drivers, within the context of the trend will start to produce additional trading opportunities in the Asian session, especially when these movements are brand new movements on the larger time frames.
Advantages of Using the Heatmap
- You can check the currency Heatmap from any computer, phone or tablet, it is portable.
- No downloads are necessary, just check the condition of the currency market.
- It is on all the time during the trading week.
- It can be used after major news items like interest rate announcements and non-farm payrolls.
- The heatmap also are also extremely useful in detecting currencies with consistent strength or weakness for possible trade entries.
- It works on web enabled devices like smartphones.
- The heatmap teaches you about the forex and why currency pairs move makes you a better trader.
- The Heatmap will teach you that there is no better indicator to trade with than the entire market along with knowing the direction of the major trends of all the currency pairs.
- The heatmap is a great tool for using on pairs that are trending or oscillating in large ranges and should produce excellent results.
The Heatmap is a very simple tool that is highly effective. After about 30 days of demo trading, you should be able to start entering trades with small amounts of real money like micro lots.
The Heatmap is the trade entry management solution for all currency traders.
The Heatmap is not a stand-alone trading tool and does not analyze trends or support and resistance, nor does it know when news items are coming.
The heatmap does not know if a pair is choppy.
The heatmap is less effective with pairs that have been moving for several days or after large intra-day moves without a re-tracement cycle.