Knowledge of the strength and weakness of each currency is vital for every forex trader. Our currency strength indicator measures strength of eight major currencies (USD, EUR, GBP, CHF, JPY, CAD, AUD, NZD) by using Relative Strength Index indicator, also known as RSI. PipTick Currency Strength Indicator shows you in a simple and quick way, when a currency is oversold, overbought or in "normal area". In this way, you can simply identify, which currency is the strongest and which is the weakest.
The indicator is calculated from 28 currency pairs and works on every MT platform. PipTick CSI uses only 7 currency pairs for calculation of the rest of 21 pairs. For correct working of the indicator you need only these seven pairs in your MT platform: EURUSD, GBPUSD, AUDUSD, NZDUSD, USDJPY, USDCHF and USDCAD.
Interpretation of the indicator
Because our PipTick CSI is based on the RSI, its interpretation is very simple. There are three areas:
Overbought area (the value of CSI is between 70 and 100)
Normal zone area (the value of CSI is between 30 and 70)
Oversold area (the value of CSI is between 0 and 30)
How to you use PipTick Currency Strength Indicator?
There are two basic aproaches how to trade curency strength and weaknes:
Buy strong currency and sell weak currency - Trend Following strategy. For example, if you see the EUR is strengthening and AUD is weakening, buy EURAUD currency pair. Do not trade if one of currencies is overbought/oversold.
Sell strong currency and buy weak currency - Counter Trend strategy. For example, if USD is overbought (above the level of 70) and JPY is oversold (under the level of 30), sell USDJPY.
You can achieve great results if you use overbought/oversold concept of currency in conjunction with Price Action or Candlestick patterns. All you have to do is wait for overbought/oversold of one currency, followed by drawing candlestick pattern like hammer or shooting star. Of course, this is just one of thousands of possible ways of using of our currency strength indicator.
You can use this indicator for long-term, swing, intraday or even scalp trading.
It is possible to use PipTick CSI for manual backtest as well. All you have to do is set parameter "Bars_Ago = 0" in indicator settings and download historical data for seven currency pairs which our indicator needs to calculate.
The indicator shows strength and weakness of eight major currencies (USD, EUR, GBP, CHF, JPY, CAD, AUD, NZD)
Simple comparison of one currency against another
Overbought and oversold area for entering or exiting the trades
Works on every timeframe (M1, M5, M15, M30, H1, H4, D1, W1, MN)
The indicator is non-repainting
Ready for backtesting (customizable look-back period)
Customizable parameters (Colors, Line thickness, RSI period...)
Excellent results in conjunction with PA and Candlestick patterns
Ideal tool for scalping
Very fast calculation
Bars_Ago - Number of bars displayed by the indicator
RSI_Period - Period for RSI calculation
Constant_Mode - Allows to use the USD as constant for comparison to another currencies
Weighted_Mode - Allows to choose between weighted or unweighted calculation
Smoothed_Mode - Allows to choose between raw or smoothed curve
Smoothed_Method - Allows to choose from for type of smoothing
Smoothed_Period - Period of smoothing calculation
Text_Size - Text size of labels
Line_Thickness - Thickness of lines
Weight_USD...NZD - USD...NZD weight coefficient
Visibility_USD...NZD - USD...NZD visibility
Color_USD...NZD - Color of USD...NZD curve and label
USD...NZD - Value of USD...NZD CSI
PipTick CSI (MT4) - First adding to the chart
PipTick CSI (MT5) - The first adding to the chart
PipTick CSI (MT4) - How to use the indicator with historical data