Proposal for a forex technical indicator - Pair of Indexed Currencies (PIC)

In a sense, when we trade currency pairs we are always trading two currencies at the same time, hoping two different things take place: perhaps one goes up while the other goes down, or more simply, one moves a lot while the other moves a little. It seems to me that it might be helpful to separately view - at a glance - how each of the two currencies in a pair have been doing over time.

To that end, I would like to propose an indicator consisting of a series of paired vertical lines beneath the chart. Each pair of lines would correspond with a candle or bar in the chart above, using the same TF. Each line in the pair of lines would represent an indexed value of the two currencies from the currency pair being viewed; the line on the left should be an indexed value of the base currency in the pair (e.g. EUR in EUR/USD), while the line on the right should be an indexed value of the quote currency.

I envision these two vertical lines rising from the same horizontal line, both lines touching one another, or very close. Additionally, each "Pair of Indexed Currencies" or "PIC" would rise from that same horizontal line. These pairs of lines could use a red line for a down move and a green line for an up move, with the height of each line corresponding to the size of the price move.

So there you have it! Nothing fancy, to be sure, though I've often wondered how each currency is effecting the move in particular currency pairs. Certainly, if I want to know bad enough, there are ways to find this information today. But I believe the convenience of a quick, automated, click-of-the-mouse glance at something like what I've described would make this part of a currency pair's story much more accessible.

Just my initial idea. In practice, it may need to be drastically changed. All opinions welcome...

draw a picture or something, it is hard to visualize what you are looking for with just words.

I see forex in the same light. But that's my philosophy and how i see the market.

For your purposes, could you not overlay a SPOT price of the EURO and a SPOT price of the USD? From the way you sound, it looks like you want to derive strength of a currency from it's various pairs. You can do that, but the only valuable infomation is (in EURUSD) the strength of the EURO compaired to USD. And that infomation isn't gleaned from 5 or 6 pairs, it's the EURUSD pair itself. And the strength of the EURO compared to USD can be described many ways, but i would think one of which being an average price of a certain period. So basically you're just looking for a histogram of a MA?...and if i'm right in assuming what you want, the yin and yang quote actually fits in pretty well here.

Or did i totally miss the ball?

hmmmm from what I can tell based on what I read is you want something that tells you if a weak dollar because of xyz in the us economy is the cause for price going up or down and vice versa is the EUR were strong for some reason causing the price to move??? It is not possible to provide this type of information (if this is what you are talking about) as there are various reasons for price change, most being the emotional behaviour of all other traders out there creating the intraday market. Just my .02, don't know if this is even along the lines of what you are talking about.

-Richard

What you are after is what is called the currency strenght meter. It basically shows u the strenght of each currency in relation to others. This product is already in the market, and there is a very crude MT4 indicator for it as well. I do not have the link for it, but if u do a search for it, u should be able to find it.

Alternatively, do a google search for ur concept, and u should come up with a few commercial products as well. And, no I do not have any of them.

Regards,
K.

Alternatively, if you want to do a bit of screen time, u can pull of the charts of eur/usd, gbp/usd, usd/chf and eur/gbp. Watch the 15M charts for 2 days, and there should be some light bulbs going off.