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Table 3
A particular currency’s detailed change compared to the other currencies by timeframe
Table 3 for the MT4 Relative Strength Indicator
The above Table 3 of the MT4 Relative Strength Indicator reflects A particular currency’s detailed change compared to the other currencies by time frame. The above table the EUR is compared to all the other currencies. You can select the currency you want compared to all the other currency by clicking on the currency in table 1.
You will note that the horizontal row for the EUR in table 2 in the previous webpage is reflected in the vertical column 3 hour column.
This Table show that except for the last 3 hours the EUR has weakened in almost every look back period compared to any other currency.
Information and trades
This kind of information above becomes potential trading opportunity warnings.
For the “With the trend trader” this is exactly what they are looking for – to join the trend when there has been a short term correction or retracement. By looking at the charts in the With the Trend traders will a start looking for selling opportunities to join the massive EUR weakening trend.
For the “retracement trader” this short term strengthening of the EUR could be the start of a trend reversal and this type of trader will be looking for opportunities to buy the EUR.
Again the important thing to look for is fundamental news. Has this temporary strengthening of the EUR results from MAJOR good news about the future of the EUR.
If not, trade like a “With the Trend “Trader and join the trend by SELLING the EUR when this temporary reversal is over.
If the news is strong and very positive for the long term future of the EUR trade like a retracement trader and look for opportunities to BUY the EUR.
10 Comments
Mark
April 8, 2015Combined with the mma indicator looks really good.
David Smythe
April 8, 2015Nice work.
Are the time frames shown in the tables the only ones that will be used?
I use H4, H1 and M15 most of the time. Are these TF’s too short for the RSI to work properly?
Cheers
Dakiwi
Alex du Plooy
April 8, 2015Those are not time frames on the tables – they are look back periods – the tables have nothing to do with the RSI – The focus is on the relative strength of currencies of time.
Tim
April 9, 2015Alex,
1. Correct me if i’m wrong. But isn’t this comparing ATR values of the currencies (with color of the direction added)?
2. Is the strength of the past day/6hr/3hr relevant, or is the increase of strength relevant? Because in that case i would suggest a short term ATR vs long term ATR. Strength would be if short term crosses long term.
Kind regards, Tim
Tim
April 9, 2015I did some digging in my old files. Please take a look at the Power Indicator. Not as an indicator in MT4, but open info on the internet.
http://www.winnersedgetrading.com/forex-power-indicator/
Tim Witstok
April 9, 2015Alex, i digged in some old files.
Please take a look at the Power Indicator. It looks exactly like what you are making.
http://www.winnersedgetrading.com/forex-power-indicator/
“It identifies the relative strength of the major currencies based on monthly, weekly, daily, 4-hour, 1-hour, and 15 minute timeframes. This relative currency strength is determined based on a highly-developed formula that weights the historical relationships that exist between the various currencies. These relative currency strengths are then used to identify the Top 5 currency pairs that are showing the highest potential for trade.”
“The numbers on the Y-axis of each chart represent average pips movement.
For instance, if you’re looking at the 15 minute chart and the ‘USD’ bar is at level ‘5’ on the ‘Forex Power’ chart, it means it has moved a weighted-average of 5 pips against the other 7 major currencies. Similarly, if the ‘EUR’ bar is at level -4.5, then it means the Euro has moved down a weighted-average of 4.5 pips against the other 7 major currencies. If the USD has moved up, and the EUR has moved down, then entering a Sell position on the EUR/USD will most likely be recommended in the ‘Top 5 pairs’ graph on the right.”
Alex du Plooy
April 10, 2015Hi Tim
Thanks for your observations
The ATR is something quite different. The ATR is a moving average of candle ranges
The True Range is the greatest of the following three values:
•difference between the current maximum and minimum (high and low);
•difference between the previous closing price and the current maximum;
•difference between the previous closing price and the current minimum.
The indicator of Average True Range is a moving average of values of the true range.
The Relative Strength tables use actual look back periods that are not averaged. The tables do measure the increase in strength or weaknesses.
The ATR measures the average increase or decrease in volatility – different concepts altogether
Alex du Plooy
April 10, 2015Hi Tim
Yes there are many Relative strength indicators available all over on the internet. Even on our website we have an alternative http://www.moneymakingforextools.com/relative-strength-of-currency-tools/
It is up to the trader to decide which presentation they like best.
The one we are discussing on these webpages is completely unique in that:
It measure the changes in currency strength in PIPS – the language of Forex traders
It uses specific quantified look back periods Barry Thornton uses – time frame changes can can vary based on the chart compression.
Alex du Plooy
April 10, 2015Tim
Sometimes we get so dazzled by information that we top thinking about ACTUAL market behavior
As explained in the training for the indicator there is no RIGHT way of reading the information. Nobody can tell you when the right time to trade is as is inferred in your example.
With the trend traders buy strong currencies and sell weak ones. Retracement traders do the opposite. Only the market can tell you which one is right each particular time. As explained in the training Fundamental analysis is required when deciding what to do.
Peter Godau
April 10, 2015It will still come down to your strategy on how you use this information as it is all past data like everything is. All the trades said that should have been taken and would have been a great trade are all easy to say in hind sight but not at the time of pulling the trigger.
In saying that the indicator does look good and the information will be helpful for the traders with sound strategies.
Look forward to it’s release.
Peter Gggggggg
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