Currency Strength Meter Forex Indicator MT4

Currency Strength Meter Forex Indicator MT4

Contents:
Description
Features
How to use
Conclusions

The base currency is the one that is quoted first in a currency pair, while the quote currency is the one that is quoted second. Using EUR/USD as an example, the EUR would be the base currency, and the USD would be the quote currency.

The closer the chart gets to 100, the stronger the base currency and the weaker the quote currency (upward trend). It makes sense to take into account the big picture of the market. So, if the indicator signals an upward trend, but the rising price movement is weak and unimpressive, it’s best to wait for more reliable buying conditions.

The same is true of the reverse situation: the closer the chart gets to 0, the stronger the quote currency and the weaker the base currency (downward trend).

Charts, which are close to 50, indicate that the strengths of currencies are roughly equal, and there is no clear trend.

Features Currency Strength Meter
When analyzing the strengths of currencies, the term “correlation” is usually used. Unfortunately, the MetaTrader 4 terminal doesn’t have an indicator that can compute the value of this parameter.

Correlation (dependence) is a coefficient reflecting the strength of the unidirectional or multidirectional movement of currencies. It can be inverse (different directions of trends) and direct (similar directions of trends).

The given parameter is often published online on the top financial websites. However, with the currency strength measurement scale built into the CurrencyStrengthMeter, you can monitor this dependence directly in the indicator’s window.

How to use Currency Strength Meter
The indicator doesn’t generate signals to open trades but provides a common understanding of market positioning for the analyzed currency pairs.

Conclusions
At first sight, the simultaneous use of four charts at once is too complicated.

You can eliminate this minor disadvantage by choosing fewer charts to be constructed or changing their visualization (thickness and style of lines).

After all, when you customize and check out the indicator, you’ll get used to it soon and quickly see its practical benefits in your trading system.