A currency represents an economy and the exchange rate of a currency in comparison to other currencies determined by how good this economy is doing in comparison to other economies and if you are trading Forex then the relationship between a currency and other currencies can give you lots of useful information.
Currency strength is determined by how its exchange rate moves in comparison to a basket of other currencies and averaged based on the number of its pairs that’s used on the strength model.
The value that is given by the strength model to a currency can be used for finding the strongest and weakest currencies and you will be able to trade former against the later.
Our strong and weak indicator calculates the strength of a currency by the amount of its percentage change on x previous bars on a given time frame across its pairs and summing up the return on each pair then dividing it by the number of pairs.
The indicator output will allow you to compare one currency with another and see the trends on currency strength data, you will be able to use this data for different purposes:
- Determining the status of an economy in comparison with others if you are an economist
- Finding best Forex pairs to trade if you are a trader (That’s what we are interested)
By finding the best FX pairs I mean those pairs which the base and quote currencies are on two opposite side of strength model like the base currency is the strongest and the quote currency is the weakest.
Features
- Uses 28 FX pairs to calculate each currency strength and you can extend it by adding new FX pairs
- Supports eight most traded currencies: USD, EUR, GBP, JPY, AUD, NZD, CAD, and NZD
- Multi time-frame, you can set the time frame that indicator will use for calculations
- Shows currency ranking on a numeric list
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