3 Ducks Trading System – What Is Behind?
3 Ducks Trading System – What Is Behind?
The 3 ducks trading system will help you to locate buying opportunities in the direction of the last uptrend and selling opportunities in the direction of the last downtrend.
The origin of the name of the 3 ducks trading system is quite interesting. It comes from the saying “to have all your ducks lined up.” The meaning of the above-mentioned depression isn’t hard to understand. It means to have everything in the correct order.
As you can see, the 3 ducks trading system consists of 3 ducks. Let’s start with the first one. It will help you to locate the last up or down trend. What about the second duck?
The second one helps to verify the direction of the trend. The purpose of the third duck is to help you spot buying or selling opportunities in the direction of the trend.
The 3 ducks trading system is a really good system as it doesn’t try to out-guess the market’s movements as well as select tops and bottoms. To cut a long story short, the 3 ducks trading system will tell you to be a buyer or a seller.
The above-mentioned system has the potential to make your life easier. So, inexperienced and experienced traders should pay more attention to the system mentioned earlier.
It is noteworthy that the 3 ducks trading system works better on currency pairs such as GBP/USD and EUR/USD. However, it is possible to use this system when it comes to any currency pair. However,
there are some currency pairs that act differently compared to other currency pairs. Lastly, it is recommended to keep an eye on the information released by various organizations.
Major currency pairs
Let’s discuss major currency pairs. First of all, there is no universal definition of major currency pairs. However, there are currency pairs that are more popular than others. So, let’s focus on the four most popular currency pairs: EUR/USD, USD/JPY, GBP/USD, and the last one is USD/CHF.
As a reminder, ‘commodity currencies’ as well as ‘cross pairs’ are also categorized as major currency pairs.
Interestingly, the currency pairs mentioned above represent some of the world’s largest economies. Moreover, they are traded in high volumes. It is important to remember that higher volumes tend to lead to smaller spreads.
What you need to remember about commodity currencies is that commodity currencies are influenced by commodity prices. The list of commodity currencies includes the Australian dollar as well as the New Zealand dollar.
For example, the AUD/USD currency pair is greatly affected by mining commodities, among other factors. We also need to mention that the Australian dollar also tends to do well when the People’s Republic of China does well. Do you know why? The countries mentioned above are big trading partners.
Interestingly, the Reserve Bank of Australia, the country’s central bank, also has a major influence over the AUD/USD currency pair.
Factors that influence major currency pairs
Various factors have the potential to influence currency pairs. However, we can’t discuss all of them due to various reasons. So, it makes sense to focus on several main factors.
It is hard not to mention interest rates. Central banks have the right to change interest rates. Unsurprisingly, it is quite difficult to deal with various issues.
How do central banks maintain monetary and financial stability? The answer is interest rates. So, it is vital to keep an eye on interest rates in order not to miss any changes.
We can’t forget about economic data as well. Traders keep an eye on reports in order to learn more about the country’s economy.
Important economic data that influence currency rates include CPI (inflation) data. You should also monitor the data about gross domestic product (GDP), purchasing managers index (PMI), etc.
People hear about elections, corruption scandals, and trade wars on a regular basis. Traders also monitor elections, trade wars, etc. Why?
Trade wars and corruption scandals introduce instability which affects the forex market, the largest financial market in the world. The government has the capacity to influence the economy, which can boost or depreciate a currency’s relative value.
As a reminder, traders usually take smaller positions on the more volatile currencies. However, they take bigger positions when it comes to less volatile currencies. Volatility is a serious issue.
It can seriously affect the currency pairs mentioned above at any time due to sudden changes in interest rates, etc. So, it is vital to pay attention to factors that have the potential to influence major currency pairs.
Frequently asked questions
Why should I use the system mentioned above?
To make a long story short, it will help you to find buying opportunities in the direction of the last uptrend as well as selling opportunities in the direction of the last downtrend.
Is the 3 ducks trading system that good?
The 3 ducks trading system is a really good system as it doesn’t try to out-guess the market’s movements. So, it makes sense to gather more information about the system mentioned earlier.
Is it suitable for any currency pair?
That is a really good question. The above-mentioned system works better on currency pairs such as GBP/USD and EUR/USD. However, feel free to test it on other currencies as well. Just remember that some currency pairs act differently than other currency pairs.
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