Currency Strength Meter :
Currency Strength Meter is a Forex Traders technical tool Which shows an at-a-glance view of what is going on in the Forex Market. Forex Strength Indicator is a Relative Heat map Table shows the percentage change in the price of various currencies against each other over the time. It is a Dynamic Heatmap Which updates regularly.
Strength Indicator shows the strength and weakness of all individual currencies so that you can focus on the currency pairs which has high breakout potential compared to others.
Trading the Strong Currency Against the weaker one.
It is critical for Day traders to know which currencies are strong and which ones are weak when trading in the Forex market. This strength or weaknesses could be a result of short-term demand and supply but can also be caused by economic announcement results. Ideally one should always trade the strongest currency against the weakest currency.
Currency Strength Explained:
The strength of a currency is determined by its performance compared to other currency. If one currency moves heavily on the positive side and the other moves on the negative side. The first one is the strong currency and the second one is a weaker currency. Normally Currency Strength meter indicates which currencies are strong and which are weak.
It is difficult for Forex Day Traders to find which currencies are strong and which one is weak when trading in the Forex market.
The strength and weakness of a currency could be as a result of short-term demand and supply but can be caused by the economic announcement.
Ideally, One should always trade the strongest one against the weakest.
See Where your Currency ranks against other currencies traded against it:
How To Use Currency Strength Meter?
The Very basic trading idea behind the indicator is, ” To Buy Strong Currency And To Sell Weak Currency” If A/B is a Currency Pair is in uptrend, you are able to determine Whether the uptrend is happening due to A’s Strength or B’s Weakness.
- Green boxes show those currencies that have fallen lower in value against the base currency.
- Red boxes show those currencies that have risen lower in value against the base currency.
- The Grey boxes indicates minimal moves.
- The lighter the color, the smaller the movement against the other currency; the darker the color, the greater the movement.
It is a quick guide to find out which currencies you might want to trade and which might be worth staying away from. For example, if one currency is very strong, and another suddenly turns weaker, you may find a trading opportunity. Such deviation between currency pairs indicates strong momentum. Conversely, if both currencies are weak, strong or average strength there is often a range or sideways move happening. You might want to stay away from playing those currency pairs.
When Placing an order in the currency market one should realize that you are actually doing two transactions at the same time. Buying/selling one currency and selling buying the other.
Buy the strength and sell the weakness is the trading Strategy for Forex Traders. Currency strength Meter is a visual technical tool.