The FX AlgoTrader Multi-Currency Range Analyzer is based on ATR data (ATR represents the AverageTrue Range for a currency pair.
Definition of 'Average True Range - ATR'
ATR is a measurement of volatility. It was introduced by Welles Wilder in his book: 'New Concepts in Technical Trading Systems'.
The 'true range' is the greatest of the following:
Current high less the current low
Absolute value of the current high less the previous close
Absolute value of the current low less the previous close
The average true range is a moving average (generally 14 day) of the true ranges.
Welles Wilder originally developed the ATR for commodities but the indicator can also be used for stocks, indices and FX.
The FX AlgoTrader Multi-Currency Rangle Analyzer allows a trader to see market volatility at a macro level and consequently select the optimum pairs to focus attention on for trade selection.
The FX AlgoTrader Range Analyzer provides automated breakout and range analysis on over 20 forex pairs in real time.
The range analyzer calculates the current daily achieved range for each analysed pair and displays the data using a histogram.
This allows traders to make easy side by side comparisons on which pairs are most active in the market. The range analysis is based on ATR (Average True Range) data using a 14 day moving average.
The Range Analyzer provides forex traders with frequency counts as new highs and lows form in real time. This provides highly indicative forex trend data essential for intraday fx pair selection.
The FX AlgoTrader Real-Time Multi-Currency Daily Range Analyzer provides a unique multi-currency daily range overview for 24 forex currency pairs on a single chart pane.
The multi-pair currency range analyzer is fully configurable and allows traders to create their own custom forex candidate pool for automated analysis.
Screenshot of the Range Analyzer showing CAD strength 11/01/11 c.08:20GMT. Note: CADJPY High Frequency count is noticeably higher than low frequency count indicating CADJPY is trending up (CAD strength). Low Frequency count on GBPCAD ,EURCAD & USDCAD is higher than corresponding high frequency count. Overall picture is CAD positive
Screenshot of GBPCAD chart displaying non discretionary entry and discretionary entry. Be aware that the analyzer indicates immediate strength based on the frequency differential between new highs/lows. You should not take the analyzer output in isolation as a trading signal. It should be used in conjunction with proper forex trade entry principles. The non-descretionary entry above was not well timed as the market subsequently retraced to retest the previous support level which then became resistance. A discretionary trade was placed at 1.54452 which went straight into profit. A discretionary approach will substantially reduce risk
Video Overview of the Range Analyzer
Range Analyzer Demo Video 2
Using the multi-currency range analysis provides forex traders with the following trading advantages:-
Real time range histograms for macro level market overview (expressed as a percentage of ATR) Ability to assess macro level market sentiment (eg CAD strength in example below) from a single forex chart Ability to see immediate indicative trend for multiple forex pairs Ability to view new high/low change frequency enabling optimized trading pair selection and direction Average high/low change frequency over last five periods provides supporting data about momentum Daily RSI data for all forex pairs Daily ATR range data for all forex pairs Configurable alert system when high/low change frequency is greater than specified threshold (essentially a trading signal) Configurable alert system when average high/low change frequency is greater than specified threshold High/Low frequency change reset option on new bar detection Remaining available pips data - based on pair achieving 100% of ATR value Auto account detection for micro and mini accounts Missing chart data alerts and bypass logic