The basis of FX trading is "buy a currency low and sell it high". If you can do this properly, you will be a great success as a Forex trader. However, many traders don’t find it that easy to grasp the strength between currencies.
The indicator for Metatrader 4 introduced this time is one of the tools to help you understand such a relationship between currencies.
Example of displaying this indicator on the EURUSD hourly chart
This indicator shows a meter summarizing the strength between currencies at the bottom right of the screen. This tells you which currency is the strongest (bought) and which currency is the weakest (sold).
In addition, because it is compatible with multiple time frames (MTF), the time frame for the calculation can be specified from the parameters settings screen. For example, you can check the dynamics between currencies on a daily chart or the dynamics between currencies on a 4-hour chart. There are many indicators that show the strength between currencies, but there are few that support MTF like this indicator.
The currencies covered by this indicator are USD, JPY, EUR, GBP, CHF, CAD, and AUD.
Trading with this indicator alone is not recommended. It is better to use this indicator as a reference when trading.
For example, in the image above, you can see that the British Pound is the most bought currency. For this reason, it may be a good idea to look for opportunities to buy GBP in anticipation of further buying. For example, focus on the fact that the best-selling currency is the Yen, and try to buy the Pound/Yen (GBPJPY) pair.
Conversely, the Pound may be overbought. In this case, you can look for contrarian setups from the sell side on the contrary. In this way, this indicator can be interpreted in various ways and must be used in combination with other indicators.
Closer view of the meter (from the above chart)
Notes on use: This indicator may not work well depending on the account used. For example, if the symbol name is irregular such as “USDJPY.010”, this indicator cannot be used.
- mTimeFrame - Defines timeframe used for calculation
- mPeriod - Defines how many bars will be used for calculation
Download the "CurrencyStrengthMeter_MTF" indicator from the button below
Tip: Can’t open the downloaded archive file (ZIP or RAR)?
Do you need help with installing this indicator into MT4 for Windows or Mac OS? Our guide HERE will help you.