The Currency Strength Meter indicator computes a “strength” from an un-weighted geometric mean of several currency pairs. This is similar to the US Dollar Index (USDX) and FXCM’s USDOLLAR. However, it does this, not just for the USD, but for 7 other currencies too. That’s 8 major currencies in total: USD, EUR, GBP, CHF, JPY, AUD, CAD and NZD. It does this by analysing up to 28 separate currency pairs.
The Currency Strength Meter can display the relative strength indices on the same chart as a % increase (or decrease) since a common reference datum, allowing easy comparison, and providing a “helicopter view” of the major currency movements on a single chart.
The Currency Strength Meter works on any time-frame, for example from daily bar charts right down to 1 minute bar charts.
The indicator can also compute and display the RSI, SMA, EMA, MACD and STOCHASTIC of the raw data, as well as displaying a correlation matrix.
Standard technical analysis techniques can also be used on the raw data, just like any other instrument. For example, drawing trend lines, looking for higher highs / lower lows, double tops / double bottoms, support & resistance lines, etc.
The following are inputs available in the application:
- Reference date mode: This can be “Chart”, “Specified date”, “N-bars/hours/days/weeks back” or “Current day/week/month/year”. When set to “Chart” the start of the chart is used as the reference. When set to “Specified date” the date (and optional time) should be entered into the “Reference date” field. When set to “N-bars/hours/days/weeks back”, the reference date is set to “N” bars/hours/days/weeks back from the current date & time, where “N” is specified in the “Number of bars/hours/days/weeks back” field. When set to “Current day/week/month/year” the start of the current day/week/month/year is used as the reference.
- Reference date: This is the reference date (and optional time) use when the mode is “Specified date”. NOTE: The format is YYYY/MM/DD hh:mm. The time part (hh:mm) is optional, but should be 24hour clock notation if used.
- Number of bars/hours/days/weeks back: This is the value of “N” used when the mode is “N-bars back”, N-hours back”, “N-days back” or “N-weeks back”.
- RSI length: The length of the RSI indicator used in the “Display mode” option.
- SMA/EMA length: The length of the SMA or EMA in the “Display mode” option.
- MACD length 1 / length 2: The lengths for the MACD indicator when using the “Display mode” option (length 1 is the fast moving average, and length 2 is the slow moving average).
- STOCHASTIC length 1 / length 2: The lengths for the STOCHASTIC indicator when using the “Display mode” option (length 1 is equivalent to the %K period, and length 2 is equivalent to the %D period). Correlation level: This value is used when colouring the correlation matrix. For example, setting to 0.75 will cause values >= 0.75 to be highlighted in the positive colour, and values <= -0.75 to be highlighted in the negative colour.
- Price type: This can Close, Median or Typical. The default is the Close price, however Median and Typical might also give useful results.
- Version: This can be Full, Mini or Lite. Also “Lite + CHF”, “Lite + CAD” and, “Lite + NZD” are now supported.
- Display mode: This can be Normal, RSI, SMA, EMA, MACD, STOCHASTIC or NORMALIZED. The Normal setting just displays the usual comparison. The other modes perform some post-processing on the ‘raw’ data by feeding it through another indicator (i.e. an RSI, SMA or MACD indicator). The lengths for these indicators are set via input parameters in the Calculation Parameters section.
- Show USD/EUR/GBP/etc.: This option can be used to turn of the displayed line for the selected currency index. NOTE: The calculation for the remaining currency strength indices remains the same, it is simply a display option to reduce some clutter on the chart.
- Label mode: This can be Off, Label, Value or Label and Value. This mode controls the text which can be displayed as a label next to the plotted line.
- Show correlation: This can be set to “Off”, “On (top-left)” or “On (bottom-left)”. The correlation is calculated over the number of bars given by the “Correlation length” input parameter. The correlation values are displayed as a triangular matrix in the corner of the chart (either top-left or bottom-left corner).
- Shaded colours for up/down: When set to Yes, the output lines are shaded (i.e. darker variant of the base colour) when the value is decreasing.
- USD/EUR/GBP/etc.: Specify the colours for the USD, EUR, GBP, etc.
- Line width: This is the width of the line
- Centre line style: This controls the line style for the centre level line.
- Centre line colour: This controls the line colour for the centre level line.
- Overbought line style: This controls the line style for the overbought level line.
- Overbought colour: This controls the line colour for overbought level line.
- Oversold line style: This controls the line style for the oversold level line.
- Oversold colour: This controls the line colour for oversold level line.
- Positive correlation colour: This colour is used to highlight strong positive correlations.
- Default correlation colour: This is the default colour used for the correlation values.
- Positive correlation colour: This colour is used to highlight strong negative correlations.
- Font: This is the font for the labels.
- Font size: This is the font size used for the correlation value matrix.
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 Trading Station Desktop software. Additionally, an FXCM account is required (including free FXCM demo accounts). Note, when using a demo account, the “Lite” mode of the indicator might be required, due to the limit on the number of currency pairs
which can be subscribed.
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