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An indicator for the strength of a currency

  • #81
  • Jun 25, 2019 7:10am Jun 25, 2019 7:10am
Quoting Rafei
{quote} Something that I've missed is that, this daily indicator is the difference between current price and the open price of the day and updates each day! How do we change the formula so that we can monitor, for example, one year? I think that for this case, I would not use daily open price as the reference, rather, I would take zero level as the reference. In other words, I would utilize price itself as the criterion. So, the formula at the first post will be changed to this: for ( j = each pair of currency ) currency = currency + iClose(...
Hi there brother, thanks for replying.

I don't quite understand... If I load your indicator and keep scrolling back in time, won't it will be plotted below the whole history of the chart? I mean, can you tell the indicator that you want it to use N number of bars in the calculation, instead of using the whole history? That is the look back period. If you wanna use one year, then the indicator will calculate 365 bars instead of calculating the whole chart history. I don't see why you would need to change the formula.
  • #82
  • Jun 25, 2019 8:58am Jun 25, 2019 8:58am
Quoting Gauer
{quote} Hi there brother, thanks for replying. I don't quite understand... If I load your indicator and keep scrolling back in time, won't it will be plotted below the whole history of the chart? I mean, can you tell the indicator that you want it to use N number of bars in the calculation, instead of using the whole history? That is the look back period. If you wanna use one year, then the indicator will calculate 365 bars instead of calculating the whole chart history. I don't see why you would need to change the formula.
Hi.
Thank you.
The original formula which is stated at the first post, has an origin in time which is the open time of the day and week. So, for instance, in daily, when a new day is come, all values return to zero.

Any way, the answer is yes,
I can write the code so that the user can determine the look-back period.
But, if I am wrong please correct. The COT is the net positions in trades, so, we should not consider the price itself? I mean the formula which I mentioned in the last posts.
HE WHO STRONGLY DESIRES TO RISE UP WILL THINK OF A WAY TO BUILD A LADDER.
  • #83
  • Edited 9:58am Jun 25, 2019 9:44am | Edited 9:58am
Quoting Rafei
{quote} Hi. Thank you. The original formula which is stated at the first post, has an origin in time which is the open time of the day and week. So, for instance, in daily, when a new day is come, all values return to zero. Any way, the answer is yes, I can write the code so that the user can determine the look-back period. But, if I am wrong please correct. The COT is the net positions in trades, so, we should not consider the price itself? I mean the formula which I mentioned in the last posts.
Instead of using the NET positions, you gonna use the currency strength value as if it were volume, we don't need to take price in consideration because we are interested in the output of the Strength_waves_all_daily_101.ex4 only , the same way we don't take price in consideration in COT index formula. The strenght waves all daily indicator is already using the price to output the strength value. We just want to know the extremes that happened in history to feed the indicator and give it a period for calculation, and then check the index to see if we are approaching a potential reversal based on currency strength value. That is what the COT Index does, it compares the current (today value) with the max and min values you feed it and plots the index so you know when you are approaching extremes. The look back period works as a sensitivity parameter.
  • #84
  • Jun 25, 2019 10:39am Jun 25, 2019 10:39am
Quoting Gauer
{quote} Instead of using the NET positions, ....
Thank you for detailed explanation.

I am really sorry, but I don't understand the meaning of maximum and minimum in the past, when we are calculating the strength of each currency at each day separately (using Strength_waves_all_daily_101.ex4)!

1- According to the formula, we recalculate the strength of each currency according to the price changes made by that currency in each day. For instance, if we want to calculate the strength of AUD against 7 other major currencies, then we calculate the following formula (which was stated at the post #33):

AUD[i] = ( currentPrice(i,AUDCAD) - dayOpenPrice(AUDCAD) ) / dayOpenPrice(AUDCAD);
AUD[i] = AUD[i] + ( currentPrice(i,AUDCHF) - dayOpenPrice(AUDCHF) ) / dayOpenPrice(AUDCHF);
AUD[i] = AUD[i] + ( currentPrice(i,AUDJPY) - dayOpenPrice(AUDJPY) ) / dayOpenPrice(AUDJPY);
AUD[i] = AUD[i] + ( currentPrice(i,AUDNZD) - dayOpenPrice(AUDNZD) ) / dayOpenPrice(AUDNZD);
AUD[i] = AUD[i] + ( currentPrice(i,AUDUSD) - dayOpenPrice(AUDUSD) ) / dayOpenPrice(AUDUSD);
AUD[i] = AUD[i] - ( currentPrice(i,EURAUD) - dayOpenPrice(EURAUD) ) / dayOpenPrice(EURAUD);
AUD[i] = AUD[i] - ( currentPrice(i,GBPAUD) - dayOpenPrice(GBPAUD) ) / dayOpenPrice(GBPAUD);

in which, i is the time and we are comparing the current price of each pair with its daily open price (for each day).
Is this OK?

2- Or you want to know how does the strength of each currency change over a long period of time (for instance 365 days as look-back period)?
If this is the case, then we should revise the formula as following:

AUD[i] = ( currentPrice(i,AUDCAD) - dayOpenPrice(AUDCAD) ) / pastPrice(AUDCAD);
AUD[i] = AUD[i] + ( currentPrice(i,AUDCHF) - pastPrice(AUDCHF) ) / pastPrice(AUDCHF);
AUD[i] = AUD[i] + ( currentPrice(i,AUDJPY) - pastPrice(AUDJPY) ) / pastPrice(AUDJPY);
AUD[i] = AUD[i] + ( currentPrice(i,AUDNZD) - pastPrice(AUDNZD) ) / pastPrice(AUDNZD);
AUD[i] = AUD[i] + ( currentPrice(i,AUDUSD) - pastPrice(AUDUSD) ) / pastPrice(AUDUSD);
AUD[i] = AUD[i] - ( currentPrice(i,EURAUD) - pastPrice(EURAUD) ) / pastPrice(EURAUD);
AUD[i] = AUD[i] - ( currentPrice(i,GBPAUD) - pastPrice(GBPAUD) ) / pastPrice(GBPAUD);

in which, pastPrice is the price in 365 days (look-back period) ago.

Which case is true?

Please excuse me for confusion.
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  • #85
  • Jun 25, 2019 11:56am Jun 25, 2019 11:56am
@Rafei

My friend, it is really simple. You load the Daily strength indicator, let's say you are interested in the latest price action, let's say three months (90 days). You gonna scroll your chart back 3 months and you will analyze the maximum and minimum currency strength values, let's say the max was 4 and min was 4,5. That is it. Then the window of calculation (look back) will be 90 bars (90 days).

So

100 * (X-B)/(A-B)

100 * (X - 4,5)/(4 - 4,5)

X is the current value of strength, the output of the currency strength indicator. So if the lookback period is 90 bars, the indicator will plot the index always using 90 bars looking in the past, from present day. You can use any look back period you want, 90, 180, 365, 1000, I don´t see the need to mess with the formula. The only thing that is gonna keep updating in the formula is the X, cause each day (or bar) will have a different X, obviously.

I can't see why you would mess with the formula of the daily strength indicator, you want it's output.
  • #86
  • Jun 25, 2019 2:14pm Jun 25, 2019 2:14pm
Quoting Gauer
@Rafei My friend, it is really simple. ...
OK dear Gauer, I got it. I will code it and inform you.

Thank you for complete explanation.
HE WHO STRONGLY DESIRES TO RISE UP WILL THINK OF A WAY TO BUILD A LADDER.
  • #87
  • Jun 26, 2019 11:16am Jun 26, 2019 11:16am
Quoting Gauer
@Rafei My friend, it is really simple. You load the Daily strength indicator, let's say you are interested in the latest price action, let's say three months (90 days). You gonna scroll your chart back 3 months and you will analyze the maximum and minimum currency strength values, let's say the max was 4 and min was 4,5. That is it.
min/max values dont have to be looked up manually, the code can do that for you, much easier and a lot faster.
Persistence will get it. Consistency will keep it.
  • #88
  • Jun 26, 2019 12:39pm Jun 26, 2019 12:39pm
Quoting Chake
{quote} min/max values dont have to be looked up manually, the code can do that for you, much easier and a lot faster.
But you don't want the exact max and min values, you want a little bit less. I prefer entering the values myself. Also, this way the indicator is more flexible, you can put any value you want. It is good practice to go back in time and study the chart, and see how price reacted when the indicators reached the extreme levels. If you focus only on the far right side of the chart you miss the big picture.
  • #89
  • Edited 5:47am Jun 27, 2019 4:26am | Edited 5:47am
Quoting Gauer
{quote} But you don't want the exact max and min values, ...
I was very busy in the last two days. But, I have created the indicator for COT of strength. Please find it at the first post.

The figure bellow, is a picture of the USDJPY chart and the COT indicator in 15 min time-frame:

Attached Image (click to enlarge)
Click to Enlarge Name: 2019-06-27_13-53-23.png Size: 65 KB


Please give your feedback.
Thanks.
HE WHO STRONGLY DESIRES TO RISE UP WILL THINK OF A WAY TO BUILD A LADDER.
  • #90
  • Jun 27, 2019 6:38am Jun 27, 2019 6:38am
Thanks a lot Rafei!

I can't test the indicator I am away from home this week, my notebook is just for browsing the internet and on top of that it is linux, if it were windows I could download MT4 and check the indicator.

So how do you think it worked, on your opinion? Did you experiment a bit inputting different max and min values and different look back periods? Can you take a screenshot of the options? I can see that even though this is 15min, when the black line reached the max levels the price turned! From up to down first, then from down up. There is something interesting in there.

Also, I recommend changing the name of the indi to CSI (currency strength index), I have a regular COT indicator and it would get confusing.

Cheers!!
  • #91
  • Jun 28, 2019 7:17am Jun 28, 2019 7:17am
Quoting Rafei
{quote} I was very busy in the last two days. But, I have created the indicator for COT of strength. Please find it at the first post. The figure bellow, is a picture of the USDJPY chart and the COT indicator in 15 min time-frame: {image} Please give your feedback. Thanks.
Hi Rafei,

I found a website that will also show the strength of a currency, but yours is a lot more convenient.

https://currency-strength.com/

You have to click on the top right button to get a 5 minute update on the website.

Take Care
  • #92
  • Jun 30, 2019 7:27am Jun 30, 2019 7:27am
Quoting Gauer
... So how do you think it worked, on your opinion? Did you experiment a bit inputting different max and min values and different look back periods? ... Also, I recommend changing the name of the indi to CSI (currency strength index), ...
Thanks dear Gauer.

I had no time to check the indicator until now. But, it is interesting to see that when a currency index is upper than the other (for instance, when USD is upper than JPY), then it is a confirmation of increasing of the price (USDJPY is increasing) and vice versa.
HE WHO STRONGLY DESIRES TO RISE UP WILL THINK OF A WAY TO BUILD A LADDER.
  • #93
  • Jun 30, 2019 7:29am Jun 30, 2019 7:29am
Quoting Pivot Ruler
{quote} Hi Rafei, I found a website that will also show the strength of a currency, ...
Hi dear Pivot Ruler, thanks a lot for such a great site. It produces very similar signals.
HE WHO STRONGLY DESIRES TO RISE UP WILL THINK OF A WAY TO BUILD A LADDER.
  • #94
  • Jul 2, 2019 3:23am Jul 2, 2019 3:23am
Hello TS, I need help in developing currency strength that looks like in the attachment. The features are similar to yours (It compares the movement of 8 major currency), however the currency strength indicator in the attachment had different features:

1. The value changes every second
2. The value ranges from 1 to 100. 50 being flat, below 40 is weak and above 60 is strong

Do u know how to create this type of CSM? Cos i need the exact formula so i can use it in my EA and I really need the formula to create that


Thanks a million
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 27 KB
Attached File(s)
File Type: ex4 CSM(2019.12.31).ex4   164 KB | 917 downloads
  • #95
  • Jul 3, 2019 5:06am Jul 3, 2019 5:06am
Im looking forward to know the formula to create currency strength like the photo in the attachment below. Wondering if TS Rafaei, or any of the FX geniuous know what is the formula, so i can code it on MT4 and MT5

Here are the features

1. It works by comparing movement between 8 major currencies
2. When login to your MT account, you need to download all the 8 major pairs and the chart first so the numbers shown on the indicator would be accurate (it reads the data from 8 major currencies, hence need to download the chart first after all)
3. The numbers are from 0 to 100 (below 40 is considered weak, above 60 is considered strong)
4. The numbers shown in the currency strength (0 to 100) changes every second on all timeframes. Be it on M1, M5, M15, H1, H4 or D1, the currency strength changes every second (my assumption means that it reads the data based on current timeframe and note that the current price always change every second, hence the Currency strength amount changes every second
5. It has 2 decimal places
6. When you open the .ex4 file, there are 2 inputs:
- Number of bars = 90
- Moving Average Periods to Smooth Lines = 0
Those are the standard inputs
7. Number of bars = 90 does NOT refer to 90 candlesticks. It refers to the number of bars used to show the curves, so it does not matter whether the input is 90, 900 or 9000. 90 is enough
8. MA period = 0 means that the 8 curves (refer to the 8 curves of the major pairs) will not be processed by moving averages


Based on these data, can any FX genious helps to create the formula used to create the currency strength?

Thanks a million. Lets post the results here so all of us, FX traders all around the world can learn together
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 27 KB
  • #96
  • Jul 3, 2019 8:56am Jul 3, 2019 8:56am
Quoting energyliger
Im looking forward to know the formula to create currency strength like the photo in the attachment below. ... {image}
Dear energyliger,
Hi.
Thanks for your indicator and description.
There are many possibilities about creating such an indicator. But, the base formula is the same as the indicator presented at the first post. Sorry, but I can not help in this case.
I know that you can use the output of the indicator and create your own calling this indicator.
Good luck.
HE WHO STRONGLY DESIRES TO RISE UP WILL THINK OF A WAY TO BUILD A LADDER.
  • #97
  • Jul 3, 2019 9:12am Jul 3, 2019 9:12am
Quoting Rafei
{quote} Dear energyliger, Hi. Thanks for your indicator and description. There are many possibilities about creating such an indicator. But, the base formula is the same as the indicator presented at the first post. Sorry, but I can not help in this case. I know that you can use the output of the indicator and create your own calling this indicator. Good luck.
thank you Rafei | i am use same view commercial indicators no needed anymore purchases
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot_443.jpg Size: 203 KB
  • #98
  • Jul 3, 2019 9:17am Jul 3, 2019 9:17am
Quoting thisara1
{quote} thank you Rafei ... {image}
Very good dear thisara1,
Please give us your feedback and tell us about your method of using Currency Strength indicator, if is possible.
Thanks.
Good luck.
HE WHO STRONGLY DESIRES TO RISE UP WILL THINK OF A WAY TO BUILD A LADDER.
  • #99
  • Jul 3, 2019 9:47am Jul 3, 2019 9:47am
Rafei,

Have you studied CCFp? It has been around many years, though I do not think very highly of it. t=635569 is a long running thread on the concept based on CCFp

Since you are experimenting now and want help, making your source code open could help your effort. You have no obligation, of course.

I have an EA tool for making such entries and exits quickly and accurately: Magnificent Seven EA. It does -not- tell user what to do--user tells EA what to do.

Example (demo acct) and attachments:
Attached Image (click to enlarge)
Click to Enlarge Name: USD_dn_190109-f.png Size: 28 KB
Attached File(s)
File Type: pdf Magnif7_User_01.pdf   462 KB | 751 downloads
File Type: ex4 Magnif7_2.60_tc.ex4   128 KB | 523 downloads
File Type: tpl #BLANK.tpl   < 1 KB | 432 downloads
File Type: ex4 TradeReport.ex4   83 KB | 479 downloads
  • #100
  • Edited 2:24pm Jul 3, 2019 11:28am | Edited 2:24pm
Quoting timingchain
Rafei, Have you studied CCFp? ...
Hi timingchain,
Thank you very much for the indicator. It looks very interesting.
I think that most strength indicators show similar signals, however, different traders do different interpretations. Some take into account crossing of the signals and others prefer to consider strength and weakness levels. Some calculate the index and others make MAs.
I am working on the relation between USD signal and Gold chart.
But, I do not find a promising method or strategy to trade currencies using currency strength.
HE WHO STRONGLY DESIRES TO RISE UP WILL THINK OF A WAY TO BUILD A LADDER.
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