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Calculating currency strength formula

  • #1
  • First Post: Edited Dec 9, 2012 10:33am Dec 8, 2012 1:00am | Edited Dec 9, 2012 10:33am
hi there i read a lot about currency strengh in net.there are many softwares that calculates currency strength.some are free and some are not.
i wonder what is behind the currency strentgh calculation?what is the algorithm and formula to find it.yee i can search internet but i really dont find anything usefull.so i post this thread.there are many premium softwares like accustrengh forex grail.i download currecny strentgh meter for free.is it different from premium softwares algorithm or all of them use the same formula to calculate the strentgh
  • #2
  • Dec 8, 2012 1:03am Dec 8, 2012 1:03am
Quoting hadi_20
hi there i read a lot about currency strengh in net.there are many softwares that calculates currency strength.some are free and some are not.
i wonder what is behind the currency strentgh calculation?what is the algorithm and formula to find it.yee i can search internet but i really dont find anything usefull.so i post this thread.there are many premium softwares like accustrengh forex grail.i download currecny strentgh meter for free.is it different from premium softwares algorithm or all of them use the same formula to calculate the strentgh...
http://www.google.com/finance?q=USDEUR

it's good enough
AVT INVENIAM VIAM AVT FACIAM
  • #3
  • Dec 8, 2012 1:06am Dec 8, 2012 1:06am
Quoting the redlion
http://www.google.com/finance?q=USDEUR

it's good enough
thanx buddy but i want to know what is the algorithm and formula.
  • #4
  • Dec 8, 2012 2:12am Dec 8, 2012 2:12am
Quoting hadi_20
thanx buddy but i want to know what is the algorithm and formula.
It could be a million ways to make algorithms to calculate a currency strength. It all deepens of the author.
It is like any other indicator... a) it tells only what the currency strength "was" (past). b) Everybody that makes
one with their own formulas, think theirs is the best and most of the time un-disclose to keep selling it.

J.
.
  • #5
  • Dec 8, 2012 3:34am Dec 8, 2012 3:34am
Quoting jeuro
It could be a million ways to make algorithms to calculate a currency strength. It all deepens of the author.
It is like any other indicator... a) it tells only what the currency strength "was" (past). b) Everybody that makes
one with their own formulas, think theirs is the best and most of the time un-disclose to keep selling it.

J.
.
yes but i wanna know which factors they use to find it.factors that may help me to build my own strentgh meter.
........................
ok at this link
Inserted Code
[url]http://www.currencystrengthmeter.com/currency-strength-meter-explained/[/url]
shows the calculation of "Currency Strength Meter"
here it is:
(PIPS / [DAILY HIGH-LOW] ) * BIS Weighted Formula + (PIPS / [DAILY HIGH-LOW] ) * BIS Weighted Formula… Then divide by Number of Pairs.
it is usefull but i dont know what is BIS Weighted Formula.
at that link it say:
BIS Weighted Formula = Once you get the reading and based on the pair, you’d multiply that using Bank of International settlement Forex volume distribution list to get the right weight.
can anybody ewplains it for me?what that means?
the software is free and open source i think
  • #6
  • Dec 8, 2012 4:18am Dec 8, 2012 4:18am
I came at this problem in whole different way than you

so I dont think you would want my suggestion but here it is anyway


just go to the google link and compare the performance of the currencies against the USD

then take the correlation of the majors.....and the standard deviation of the majors / standard deviation of the euro

calculate your position sizes in dollar amount or your home currency


then take positions according to your views on upcoming events and the favorable momentum you see in the charts

currency strength formula won't really help you make money if the market disagrees with it....still comes down to the same age old problem....up? or down?
AVT INVENIAM VIAM AVT FACIAM
  • #7
  • Dec 8, 2012 6:47am Dec 8, 2012 6:47am
Quoting hadi_20
yes but i wanna know which factors they use to find it.factors that may help me to build my own strentgh meter.
........................

BIS Weighted Formula = Once you get the reading and based on the pair, you’d multiply that using Bank of International settlement Forex volume distribution list to get the right weight.
can anybody ewplains it for me?what that means?
the software is free and open source i think
It is a whole bunch of non-sense.
You can go to the Bank of international settlement (http://www.bis.org/) and you could find the Volume distribution per pair. So what??? I think they publish it quarterly, so the info is always late.
Most likely that info would have to be input manually into the indicator, making it worthless in real time.
An on top of everything, in forex, Volume is irrelevant to price changes.

Probably free as "bait" from just another "seller" of something... trying to impress with people
a lot of nothing.

If you want to build your own, just work counting pips of movements. No, I do not have a formula,
no matter what formula/calculation you do, it is just another lagging indicator.

J.
.
  • #8
  • Last Post: Dec 8, 2012 7:54am Dec 8, 2012 7:54am
Quoting jeuro
It is a whole bunch of non-sense.
You can go to the Bank of international settlement (http://www.bis.org/) and you could find the Volume distribution per pair. So what??? I think they publish it quarterly, so the info is always late.
Most likely that info would have to be input manually into the indicator, making it worthless in real time.
An on top of everything, in forex, Volume is irrelevant to price changes.

Probably free as "bait" from just another "seller" of something... trying to impress with people
a lot of nothing....
thnx a lot jeuro yes maybe you are right.it can be lagging indicator.but anyway i wanna clue on how to calculate it and factors that may affect it.factors that accustrentgh like softwares use them and sell them for lot of bucks.
it is my first post in the forum and thnx everybody for their replys
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