How Does the Currency Strength meter work?

Our currency strength meter uses live exchange rates to calculate the cumulative rates, applies weighted averages to assess the strength of a currency against other currencies. Compared to the simple currency strength meters on other sites that don't use weighted averages in their calculations, the comprehensive currency strength meter available here calculates currency strength based on weighted averages of currencies to make a better comparison.

Simple currency meters just report the currency fluctuations. Such indicators have little to no predictive power for the future. Since they are based on past prices, they reflect past performance with no future relevance or predictive input. That is why it is better to use a currency strength meter that applies a cumulative exchange-rate price formula to decide strength.

Compared to these basic meters, our currency strength meter formula and algorithm assesses the past 24 hours of activity to calculate total currency strength and pools all currency pairs linked with a currency. The result of these computations is shown as a chart to help traders.
The advanced currency meter algorithm uses real-time currency data and applies indicators to this data to predict their currency pair movements. Using such a currency strength meter in your trading strategy will make fundamental analysis more informed, and a trading strategy that applies such information is more successful for traders.

How often is it updated?

We update the data hourly. Our site gathers data about foreign currency in real-time and evaluates it for its currency strength analysis.

You can also filter the data to update in the following intervals:

• Every 1 hour
• Every 4 hours
• Once a day
• Once a week

How to use it?

A currency strength meter can be helpful in your trading regardless of the trading techniques you use.

If you trade with the trends, the currency strength meter will help you identify the most robust trend and let you know which currency pair is the strongest and the weakest. If you tend to trade in price ranges, you can use the currency strength meter to identify suitable ranges for currency pairs. Since the currency strength meter gives status and prediction of future strength, traders can apply the information provided by the strength meter to verify other signals given by technical indicators like the MACD or SMA.

Why is the Currency strength Meter Important?

When you trade in the foreign exchange market, you deal with currency 'pairs' or sets. It isn't possible to buy a currency without selling some other for it. For instance, if you are looking to buy U.S. dollars (USD), you can sell your Australian Dollars (AUD) in trade for those dollars. You are trading the currency pair AUD/USD "short" - selling the AUD to buy the dollar. Such exchanges happen a lot.

​Most forex traders focus on figuring out how a currency set will move. They usually have problems predicting the trend. Traders try using technical indicators like currency oscillators, chart patterns, and Fibonacci sequences. None have shown conclusive success in predicting the trends of currency pair movement.

The information of the currency strength meter on its own is not sufficient for ensuring a successful trading strategy. However, it is a helpful tool supporting trading strategy decisions.
Traders are advised to make their personal trading strategies and apply the currency strength meter data to see how it affects the process. If the data supports the trading plan, you can implement it. If the currency strength information contradicts the strategy, it is better to avoid the trade for now