I wanted to know if it is possible to calculate currency strength myself (and how to do so if possible) - does anyone know the methodology used by Babypips for the ‘Currency Strength Meter’ (marketmilk.babypips. com/currency-strength ) and the actual times for the ‘time interval’ and ‘price stream’ selections - eg. is the price stream for last close 5pm NY to which time is it then calculated to if 1D is selected for the ‘time interval’ (is it 5pm prior day to 5pm latest close?)
There appears to be a lot of currency strength indicators out there and yet they all seem to give different results, so I am trying to see if it is possible to replicate Babypips currency strength meter (or at least understand the methodology used for it, the timings for the selection boxes ‘time interval’ and ‘price stream’ and the price source provider it applies for the calculator) as this is the one I reference most.
Most currency strength meters rely on calculation of price change. The price changes for each currency are collected from each major pair it is seen in and an average is calculated. There are usually 7 pairs for each currency.
This sounds logical but it does mean that the average calculated can be deformed by one or two pairs with much larger price changes than the others.
I use a visual methodology which simply notes whether price is above or below the 50EMA for each of the 28 pairs. Above is bullish for the base currency and bearish for the counter currency. This gives a score of 0-7 bullish points v’s 0-7 bearish points per currency. Right now the scores off the D1 charts are USD 7-0, down to AUD 0-7, with the others in between: GBP is 3-4 and has fallen fast. Use a different MA and different time-frame according to your strategy. Its very quick and simple and almost impossible to make an error.
For example, if the Price Stream is set to "Last Closed " and the Time Interval is set to "1h ", then the price will be based on the close price of the previous hour. If the time is currently 10:14 am, and you’re looking at the EUR/USD, the price you’ll see will be based on its close price at 9:59 am. In contrast, if the Price Stream was set to "Real-Time ", the price you’ll see will be based on the most recent price available at 10:14 am.
Thank you. I still cant find the 1 day close timings or methodology, the 1hr, 4hr etc would make sense it would be the prior close as the current one would be live data instead.