Ok so there is something that people don’t take into consideration and with good reason. In my opinion this is one of the reasons why trading is more difficult than it should be. Have you ever watched two currency indexes and seen how the pair moves based on each individually?
The USD has more weight. More influence. Some currencies have higher weight than others. So even when there might be a huge rally in CHF, how much exactly does it move price on each currency pair chart… Perhaps very little perhaps alot. The same applies to every currency. This is why some pairs are more volatile than others.
So I think if you look at the CSM you might see why it’s not so great. Even if a currency is weakest. If that currency rally has little weight behind it ,just how much of a rally in each pair will you get? So the CSM would only be good in an ideal world where each currency has equal weight so the strongest and weakest really were the best to trade. But it’s not so…
So bottom line is. Add the atr indicator the chart and out of the main 28 pairs try to only trade the top most volatile. The moves will have more pips enabling a better R:R
One thing that I think would help on the CSM is to make the USD the common dominator so the other currencies are displayed in ratio to the dollar. But even then the remaining currencies still have different weights between them. I also have not quite figured it all out. Not as easy as people want to think.
Hope that makes sense.