THE SIGNAL GRID
The four analytical disciplines of currency economics, flow analysis, technical analysis and long-term valuation which come together to make a currency strategy decision can be expressed in the form of a signal grid. To be sure, this is a very simple model. However, what is important here is having the discipline to create it. Only when all four analytical indicators are reading buy or sell together should one put out an official currency strategy recommendation. Granted, this is still no guarantee of success. It should however have a number of positive effects on one’s trading or analytical performance:
It should eliminate the bias created by relying only on one analytical type
By nature, four buy signals make up a more powerful buy signal than just one
The bottom line — it should improve one’s performance and total returns