The FX AlgoTrader forex currency strength meter (Index Analyser) provides real time online currency strength and weakness data direct to the trader. The strength meter application uses real time index data provided by FX AlgoTrader and is delivered as a Java based application which runs on the traders machine. The strength meter allows forex traders to immediately see the best forex pairs to trade based on multi-timeframe currency index strength/weakness analysis.
Forex traders can set custom filters so that they receive email alerts when currencies fit the traders pre-determined filter criteria. The strength meter also allows traders to log index data so historical index analysis can be created.
Currency index data provides traders with a unique ability to analyse the forex market from a macro level rather than analysing individual forex pairs.
By comparing index data for all the forex major currencies over multiple timeframes traders are able to make accurate, quick and informed decisions regarding the best pairs to trade. No serious forex trader should be without some form of forex currency strength analysis or metering tool!
The data which the system uses comes from the FX AlgoTrader web server. The index data is calculated using LFX currency index formulae published by the LiteForex brokerage service. The Index data is calculated in real time from spot FX rates and streamed to the subscriber on their local machine.
The application incorporates multi-timeframe filters which allow traders to see index data sorted into strength and weakness order by timeframe. Traders can also set filters for each timeframe so that they receive alerts when currencies fall within the forex trader's custom filter criteria.
In the screenshot above we can see the forex currency strength meter monthly (MN1) row has a red background - this means it isn't included in the filter criteria. We can also see boxes with a green background on the weekly (W1), daily (D1), 4 hourly (H4) and hourly (H1), this represents our active filter area.
To understand how the filter system works you need to know the difference between a 'currency' and a 'currency pair'. A 'currency' is a singular entity such as the Euro (EUR) or Sterling (GBP) whereas a 'currency pair' is made up of two 'currencies' eg EURGBP which represents... the Euro/Sterling exchange rate.
In order for the system to trigger an alert a currency pair must fall within the green shaded areas.......so the weakest currency must fall into all the active filter timeframes in the weak zone (the left hand side) and the strongest currency must fall into all the active filter timeframes in the strong zone (the right hand side)... The currency strength meter data is sorted in real time into strength and weakness order where the strongest currencies are on the right hand side and the weakest are on the left hand side.
So in the screenshot below we can see GBP falls into all the active filter zones in the weakest currency area (the left hand side) and the USD falls into all the active filter zones for the strongest currencies (the right hand side). Therefore the GBPUSD is the ideal pair to short.
When currencies meet the filter criteria the forex currency strength meter application produces an alert with a corresponding trigger time which is displayed in the alerts table as shown below.
The system now has a Yahoo email alert facility where any alerts sent to the Alert trigger table are also sent to the forex trader's designated Yahoo account. You can set up a Yahoo mail account for free anytime.
System running on top of Outlook
System running on top of Word
Strength Meter on top of MetaTrader 4
Forex currency strength meter displayed on a multiple monitor set up
Colour coded gain indications - red cells indicate a negative index value, blue cells a positive index value and white cells represent no change. Color coded cells help traders see what's hot and what's not!
Currencies auto-sorted into strength order for each timeframe
Forex day trader settings - The screenshot above shows a potential filter set up for forex day traders. The forex trader has excluded the monthly and weekly index data so that the active filters are only based on the daily, 4 Hourly and hourly timeframes. Using shorter timeframe filters allows the forex trader to take advantage of short duration trend changes/reversals etc but the forex trader should also factor in the long term trend and ensure their exit projections are above/below any significant price reaction points which could be price derived technical support resistance levels.
Forex position trader settings - The screenshot above is using 4 timeframes for the active filter zone. Here the trader is essentially asking the system to produce alerts when a currency pair satisfies the following conditions:-
Strongest currency must be in the top three strongest for the month and week
Weakest currency must be in the weakest three for the month and week
Strongest currency must be the strongest on the day
Weakest currency must be the weakest on the day
Strongest currency must be in the top two strongest currencies in the last 4 hours
Weakest currency must be in the weakest two currencies in the last 4 hours
Strongest and weakest currencies can be in any position within the last hour
The reason the forex position trader excluded the hourly timeframe is very deliberate - using the system in this way allows the position trader to take opportunity of short term hourly reversals where price action retests support or resistance levels in a strong trend.. aka 'buying a dip in an uptrend' and 'selling a rally' in a downtrend.
Potential forex trading candidates
This is a brand new feature which provides real time data logging on all time frames. The system saves forex strength/weakness data at a trader defined interval. This allows the trader to see how the currency index data is changing over time on the specific timeframe of choice. This new option gives the trader historical context when analysing forex currency strength data for trading decisions. This is a very powerful new feature.
Forex traders will note how the currency index data moves on the hourly timeframe. At the time of writing the USD shows strength accross the board but we note a momentary weakness on the USD where it moves from the strongest currency to the 7th strongest on the day... this represents a dip buying opportunity. In the same way we see GBP languishing as the weakest currency on the day and a momentary rally propels it to the third strongest...
Analysing the GBPUSD shows this being played out by price.
Demo of forex currency strength meter
forex currency strength meter in use 5th June 2014
forex currency strength meter in use 4th June 2014
forex currency strength meter in use 3rd June 2014
forex currency strength meter in use 2nd June 2014
forex currency strength meter in use 29th May 2014
|Complete platform independence||Forex traders do not need to have a trading platform open - they can use the analyzer in conjunction with any Windows application. This is invaluable for part time traders with regular jobs|
|An index based analysis of the market||Forex traders can easily compare major currencies against each other without having to use an individual pair based approach. This allows a macro perspective of the market as it is easy to see broad based strength in one currency vs weakness in another|
|Currency strength rankings||The forex currency strength meter automatically sorts currencies by their strength/weakness over H1,H4,D1 and MN1 timefranes. This allows traders to easily see which currencies are strengthening/weakening in relation to each other and over what timeframe|
|Automatic selection of forex pairs which meet trader defined filter requirements||The forex trader is provided with a list of forex pairs which satisfy the filter requirements (defined by the trader using filters). This means trades will generally have market flow on their side as traders naturally align themelves to market flow and trend. If you buy the strongest and sell the weakest pairs the odds of the trade having a positive outcome improve significantly|
|Email alerts||The newest release of the forex currency strength meter has automated email alerts so traders can be assured they will always be alerted when the appropriate conditions in the market which meet their custom filter requirements occur.|
FX AlgoTrader Pivot Systems would allow the trader to refine their entry and exit plans for forex pair candidates generates by the FX AlgoTrader forex currency strength meter.
|Monthly Subscription License (no contract lock in)