Currency Strength Meter
Live Currency Strength
The currency strength meter is a graphical representation of each currency's relative strength — the indicator displays which currencies are strong and weak in the current Forex market.
Traders can use the currency strength to decide which currency pairs have the best trading opportunities.
You can see the current relative strength of all major forex currencies. The Forex strength meter is a powerful tool that helps you become a more successful trader.
What is a currency strength meter or currency strength indicator?
The Forex strength meter is an algorithm-based technical indicator. It determines the relative strength of a currency and is usually used in MT4, MT5, or any other platform that supports custom indicators. You can also find it online, like on this page.
Exchange rates are used to measure the aggregate, comparable strength of each currency. Simple meters may not use weighted calculations, while more advanced ones, like this one, may use their weightings.
The algorithm looks at the previous 24 hours to calculate overall currency strength and combines all currency pairs associated with a currency. Typically, the data is displayed in the form of a graph.
Let's take a look at how the strength meter works.
Those who don't know what currency meters do - they are simply indicators that measure main currencies' strengths in the Forex market (majors - 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 behind FX Strength Meter is to think of it as a "filter". It allows us to determine whether the US dollar is strengthening or weakening, for example, which is essential to understand at all times.
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 current 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.