Entry
Entry
Lesson 7 : Pair Selection
Lesson 7 : Pair Selection
Lesson 7 : Pair Selection
Advanced
Advanced
Advanced
6 min
6 min
6 min
Asset Focus
Asset Focus
Asset Focus
Selecting the correct pair when executing in a market with correlated assets is critical because it can significantly influence the outcome of the trade. While this lesson is centered on the indices market, the same logic is applicable to currency pairs and commodities.
Selecting the correct pair when executing in a market with correlated assets is critical because it can significantly influence the outcome of the trade. While this lesson is centered on the indices market, the same logic is applicable to currency pairs and commodities.
Selecting the correct pair when executing in a market with correlated assets is critical because it can significantly influence the outcome of the trade. While this lesson is centered on the indices market, the same logic is applicable to currency pairs and commodities.
When selecting the pair to enter, the focus remains on intraday signatures that reveal the leader in strength or weakness for the session. Higher timeframe divergences or differences in price action are not the factors used to determine the best pair in the moment.
When selecting the pair to enter, the focus remains on intraday signatures that reveal the leader in strength or weakness for the session. Higher timeframe divergences or differences in price action are not the factors used to determine the best pair in the moment.
When selecting the pair to enter, the focus remains on intraday signatures that reveal the leader in strength or weakness for the session. Higher timeframe divergences or differences in price action are not the factors used to determine the best pair in the moment.
In addition to the attention on intraday price action, relative strength and weakness across pairs is most clearly revealed following the release of volatility drivers, particularly at the 9:30 market open. Although positioning on the stronger pair can be attempted before volatility drivers, it is important to remain aware of the potential for strength and weakness flips that often occur after the New York open.
In addition to the attention on intraday price action, relative strength and weakness across pairs is most clearly revealed following the release of volatility drivers, particularly at the 9:30 market open. Although positioning on the stronger pair can be attempted before volatility drivers, it is important to remain aware of the potential for strength and weakness flips that often occur after the New York open.
In addition to the attention on intraday price action, relative strength and weakness across pairs is most clearly revealed following the release of volatility drivers, particularly at the 9:30 market open. Although positioning on the stronger pair can be attempted before volatility drivers, it is important to remain aware of the potential for strength and weakness flips that often occur after the New York open.
ES and NQ
ES and NQ
ES and NQ
The assets with the highest correlation in the indices market are ES (S&P 500) and NQ (Nasdaq). These should remain the primary focus since their relationship is direct and any break in correlation will be evident. For the most straightforward approach, these are the only two pairs that need to be compared.
The assets with the highest correlation in the indices market are ES (S&P 500) and NQ (Nasdaq). These should remain the primary focus since their relationship is direct and any break in correlation will be evident. For the most straightforward approach, these are the only two pairs that need to be compared.
The assets with the highest correlation in the indices market are ES (S&P 500) and NQ (Nasdaq). These should remain the primary focus since their relationship is direct and any break in correlation will be evident. For the most straightforward approach, these are the only two pairs that need to be compared.
Divergences are the first and most mechanical signal of which pair is stronger or weaker at the time of entry. When seeking upside, if one pair prints a higher low while the other prints a lower low at the same point, the asset with the higher low is the preferred long entry. When seeking downside, if one pair prints a lower high while the other prints a higher high at the same point, the asset with the lower high is the preferred short entry.
Divergences are the first and most mechanical signal of which pair is stronger or weaker at the time of entry. When seeking upside, if one pair prints a higher low while the other prints a lower low at the same point, the asset with the higher low is the preferred long entry. When seeking downside, if one pair prints a lower high while the other prints a higher high at the same point, the asset with the lower high is the preferred short entry.
Divergences are the first and most mechanical signal of which pair is stronger or weaker at the time of entry. When seeking upside, if one pair prints a higher low while the other prints a lower low at the same point, the asset with the higher low is the preferred long entry. When seeking downside, if one pair prints a lower high while the other prints a higher high at the same point, the asset with the lower high is the preferred short entry.
Comparing Price Legs
Comparing Price Legs
Comparing Price Legs
Divergences will not always be present in the market. Strength and weakness can also be judged by comparing related legs of price. Since entries are not taken within the first half of the daily candle due to the daily profiling process, there is context available to review and compare. The objective is to identify clear signs that one pair is holding up more in price runs higher or holding down more in price runs lower. This is best observed on a higher timeframe such as the hourly, where the wicks and bodies of candles display the signs. The behavior of price will reveal which pair is stronger and which is weaker.
Divergences will not always be present in the market. Strength and weakness can also be judged by comparing related legs of price. Since entries are not taken within the first half of the daily candle due to the daily profiling process, there is context available to review and compare. The objective is to identify clear signs that one pair is holding up more in price runs higher or holding down more in price runs lower. This is best observed on a higher timeframe such as the hourly, where the wicks and bodies of candles display the signs. The behavior of price will reveal which pair is stronger and which is weaker.
Divergences will not always be present in the market. Strength and weakness can also be judged by comparing related legs of price. Since entries are not taken within the first half of the daily candle due to the daily profiling process, there is context available to review and compare. The objective is to identify clear signs that one pair is holding up more in price runs higher or holding down more in price runs lower. This is best observed on a higher timeframe such as the hourly, where the wicks and bodies of candles display the signs. The behavior of price will reveal which pair is stronger and which is weaker.
Correlated Markets
Correlated Markets
Correlated Markets
There will be scenarios at the time of entry when both pairs are moving in high correlation. In these cases, NQ should be the default choice for execution. NQ is most often the leading asset in a standard market since it is the more volatile pair, which frequently results in faster and more significant price runs compared to the other indices.
There will be scenarios at the time of entry when both pairs are moving in high correlation. In these cases, NQ should be the default choice for execution. NQ is most often the leading asset in a standard market since it is the more volatile pair, which frequently results in faster and more significant price runs compared to the other indices.
There will be scenarios at the time of entry when both pairs are moving in high correlation. In these cases, NQ should be the default choice for execution. NQ is most often the leading asset in a standard market since it is the more volatile pair, which frequently results in faster and more significant price runs compared to the other indices.
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2025 The Market Lens - All Rights Reserved
The standard for trading education and guidance
2025 The Market Lens - All Rights Reserved
The standard for trading education and guidance
2025 The Market Lens - All Rights Reserved
The standard for trading education and guidance