Relative Rotation Graphs?

Relative Rotation Graphs? What are they?

They’re the brainchild of Julius de Kempenaer. For an introduction to their use go to Relative Rotation Graphs.

In this post, I’ll be discussing how I use them for identifying the FX pairs I select for trading.

My Trader’s Timeframe is the 18-day Swing. What this means is I am trading the monthly trend. So, my first port of call in my analysis is the monthly RRG with the USD as the base currency.

RRG (USD)

 

Here’s a brief description of the quadrants:

  1. The top right-hand quadrant is one signifying strength.
  2. The bottom left-hand quadrant is one signifying weakness.
  3. The bottom right-hand quadrant is one signifying the transition from strength to weakness.
  4. The top left-hand quadrant is one signifying the transition from weakness to strength.

So, in the RRG chart above, the USD is weak against the CAD, AUD and EUR. The GBP may be ready to make a move against the USD. The NZD and JPY are weakening against the USD.

The chart also provides a perspective for the crosses.  I’d consider buying the CAD, AUD and EUR against the NZD and JPY.

I stress the RRG is merely the first step of the analysis. But, it is an important one because it fines down the analysis horizon.

 

 

 

10 thoughts on “Relative Rotation Graphs?”

      1. Hi Ray, i meant any advantage in using a RRG over the normal currency strength charts?
        I wasnt meaning the sine wave circle,to a RRG.
        I just thought of sinusoid waveform from studying electronics years ago, it looks similar.
        cheers baz

        1. Hi Baz

          Oh, I see.

          The two perform different functions. RRG’s provide a path from strength to weakness, along the way. it does do a strength comparison. CSM perform a direct strength comparison. I prefer RRGs.

    1. Hi baz,

      The big advantage of RRG over normal currency charts is that you can watch the relative relationships between the various currencies evolve over time and keep an eye on “the BIG picture in ONE picture”

      Julius

    1. Thanks for dropping by. I’d love to chat when I return from the US in mid-Feb. I’ll drop you a line. Thank you for the invite! Appreciate

  1. Thank you Julius and Ray, Perhaps in a future blog you could show an example of RRG and CS chart as a comparison. In your forex example i read the RRG the same as a CS chart, the EUR is gaining and NZD weakening. If i use a daily CS chart to plot the majors, i could see the history and see them develop , cross over, peak etc. Im open to the concept, Im just not seeing an advantage at the moment.
    Another thought maybe we are use to reading left to right? And i am having trouble with the lagging quadrant if weakens then after awhile weakens again or is lagging quadrant a form of consolidation?
    cheers Baz

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