Currency strength

Please how can I be checking currency strength or weakness

There is a thread here for it and it’s been running for years with the OG dropping trade ideas.
Will mention ur name there.

Okay, thanks …
I will be waiting

Hello @Mayor.Marvo ! I think @janey001 mispelled your username on that thread and may not get the notification.

Here it is :point_down: :point_down: :point_down:

1 Like

Thank you for the help.


Glad you asked because the currency strength indicator as people usually believe it to be, isn’t that great. When poorly coded, the indicator could give wrong currency strength values which won’t serve it’s true purpose. Saying this with experience as my MT4 froze after facing the same issue. With time what I’ve realized is that the best way to test a currency’s strength and weakness is via a currency correlation indicator. With the latest technologies in line, the correlation tool does not cause any of the above problems and nearly the same benefits. I’ve been using the tool with fxview, IG and fxtm, and found it more trusting.

I check currency strengths and weaknesses after each market session. I check the 28 major D1 charts of the 8 major currencies, with 50EMA. I note the latest slope of the EMA, upwards or downwards: upwards is bullish for the base currency and bearish for the counter currency, vice versa for downwards slopes. This gives a score per currency of 0-7 bullish points or 0-7 bearish points.

For example, recently all 7 charts have had bullish EMA slopes for GBP, making it the strongest currency with a score of 7-0 buliish:bearish. CAD was in second place scoring 6-1, AUD was in third place scoring 5-2 etc. etc. JPY was weakest currency with 0-7.

This method takes about 5 minutes and closely matches other approaches.

Obviously, the EMA’s period can be adjusted to suit trading style.

1 Like

my process is of a similar type but instead of an EMA I use 2 SMAs, one long period and one short period. Price above both for a +1 point for base currency and -1 for counter currency, the opposite when price is below both. When price is between the 2 it gives a zero score to both sides of the pair (ranging or reversing). Sometimes there are extremes and other times some currencies seem really undecided. It gives a decent picture of when the market contracts or resets.


Cheers tommor, nice way of looking at is also. Do you record all of this info like Dennis? And if so do you put it on a spreadsheet?

I do log it on a spreadsheet each night.

This means I can match up strongest v’s weakest currencies in all the 28 major pairs. Today this shows CAD/JPY as most bullish, with scores of 7-0/0-7. CAD/CHF is next with 7-0/1-6, also GBP/JPY, 6-1/0-7.

What I don’t do is keep this info on the log beyond the next close. I have found that interesting but not essential info.

1 Like

But would you not need it for back testing purposes?

No, there’s now nothing to back-test.

Hello tommor, what would your views be on this Buystop demo on the GJ h4 in line with Gbp/Jpy been 6-1/0-7 and it been a similar position on Dennis’s thread.
Would the 2 indecision candles be adding too much risk on the daily?
Also the weekly was very much a straight line up
Whenever you get a chance Cheers.

this indicator sucks,this line DOES NOT show reall strenght,waste of time . Do you really believe one line under your chart shows reall situation in market now/ :wink:

I’m afraid my view goes off at a tangent to your direction. I never look at bars under D1, I never draw s/r lines (or trend-lines), I never pay any attention to s/r levels if price is in a trend.

The currency correlation indicator is the one you should be trying your hands and mind at. I’ve been working with it lately and it’s quite good.

Currency strength meter is one tool you could use. A currency’s strength and weakness is determined by its value against other currencies.
Looking at fundamental factors is also important, if the economy of the country is weak, its currency is weak and its value is less. Understanding the economy of the currency, makes you understand the strength and weakness of the currency as well.

I hope you know that currency strength is determined by the interaction of a variety of local and international factors such as the demand and supply in the foreign exchange markets, the interest rates of the central banks, the inflation and growth and many other aspects. Here you can either calculate by yourself strength of the currency on the examples of various currency pairs (eur/usd to calculate eur) or you can rely on fundamental analysis such as checking news and finding information about countries domestic economy through various timelines to determine the dynamics. If you’re a mathematician you can easily calculate and determine everything you need.