Live Currency Strength Indicator
The currency strength meter is a graphical representation of the strength or weakness of currencies in the Forex market.
You can see the relative strength of all majors.
Traders can use currency strength to predict currency movements when making decisions for the best trading opportunities.
You have real-time data for the current market, and you can decide which currency is under or overvalued.
This is an excellent additional signal or filter in Forex technical analysis.
What is a Currency Strength Meter or CS Indicator?
Currency Strength Meter is a technical indicator that determines the relative strength of currencies. It exists for MT4, MT5, and other trading platforms. Also can be found online at sites like this one.
Realtime exchange rates are used to measure the aggregate, comparable strength. Simple meters may not use weighted calculations, while more advanced, like this one, use their weighting factors. Our calculation method also shows the direction of the change (denoted with an arrow close to the name of the currency).
The algorithm looks at the previous 24 hours to calculate the overall strength and combines all currency pairs associated with a currency. The data obtained as a result of the calculations is usually displayed as a chart.
How the currency strength meter works?
Those who don't know what currency meters do - they measure main currencies' strengths in the Forex market (USD, GBP, EUR, CHF, JPY, CAD, NZD, and AUD) by comparing all 28 crosses between them. It's a quick way for Forex traders to see whether market conditions positively or negatively affect their positions.
Let's look at how this technical indicator works and how it can help traders make informed trading decisions.
There are five steps in all:
- Identify the base currency.
- Match the base currency with all available Forex pairs.
- Calculate the relative strength of each paired currency.
- Calculate the average score.
- Use the result.
The basic idea of the strength meter is to think of it as a "filter" in decisions. It allows us to determine, for example, whether the US dollar is strengthening or weakening, which is always essential to know.
Another thing to note is that a particular currency's strength is always determined by the timeframes you set for it. For example, EUR can be solid for today's timeframe, but it is one of the weakest on the list in monthly analysis.
Depending on your Forex trading style, you may need to look at other time frames. If you are an intraday trader, you need more recent data. If you are a long-term trader, you need monthly values.
How often is it updated?
Our site checks forex data every minute in real-time and determines the strength. Any changes will be displayed when you refresh the page.
How to trade FX with the Currency Strength Meter?
There are many ways to use the currency strength meter in your trading, and they all depend on your trading style.
If you are trading in the trend direction, get the most robust trend based on the pair with the strongest and weakest currency. If you want to trade in a range, you can choose currencies where there is a slight difference in strength.
The way recommended by the professionals is to use a forex strength meter as an additional confirmation.
Short-term strength indicator
It gives a snapshot of the currency's current strength, which helps make trading decisions or verify signals provided by other indicators. However, it is not more than a "feel" for the market, and we always use it with long-term indicators like MACD or SMA.
The currency strength indicator and its use in trading strategies
For any ideas and suggestions related to the functionality of the currency strength meter, do not hesitate to contact us.