Indices like the US Dollar Index (USDX) or the Dow Jones FXCM Dollar Index (USDOLLAR) measure the value of the United States Dollar relative to a “basket” of foreign currencies. The Currency Strength Bars indicator uses similar techniques to calculate the strength indices for up to 8 major currencies (USD, EUR, GBP, CHF, JPY, AUD, CAD and NZD). It does this by analysing 28 separate currency pairs.
The raw strength indices are further processed using the popular RSI (Relative Strength Index) indicator. The RSI does a great job of “normalizing” the strength values for all 8 currencies into a range between 0 (very weak) and 100 (very strong).
The indicator ranks all 8 currencies according to their strengths and displays them as a “strength bar” (either horizontal or vertical) on your chart.
Key to a good analysis of the forex market is the ability to consider multiple time-frames. The Currency Strength Bar indicator does just that. Up to 4 time-frames can be assessed with a single instance of the indicator.
The Currency Strength Bars indicator is useful for finding good candidate currency pairs for trading. For example, one should look to trade a strong vs weak pair, since these pairs will likely have the best trends. Once candidate currency pairs are found, then other trading techniques such as traditional indicators, support / resistance, etc. may be used to find an entry.
The following parameters are available in this app:
The application displayed on this page does not take in to consideration your individual personal circumstances and trading objectives. Therefore it should not be considered as a personal recommendation or investment advice. Past performance is not indicative of future results.
There is no guarantee that the systems, trading techniques, trading methods, and/or indicators will result in profits or not result in losses.
This indicator is only compatible with FXCM’s Trading Station Desktop. Additionally, an FXCM account is required (including free FXCM demo accounts). Note, when using a demo account, the “Lite” or “Lite+” modes of the indicator might be required, due to the limit on the number of currency pairs which can be subscribed.
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