There seems to be a gathering interest in Relative Currency Strength here at FF lately. There's a flurry of activity focused on the subject of determining strong vs. weak currencies, including Steve Hopwood's latest EA (using Hanover's Recent Strength indicator), Scooby-Doo's about-to-be-unveiled 'top-secret' EA, billbss' new thread using RS charts and divergence and capito's thread that may have been the kick-start to all of this with his introduction of SIGTrader's very handy LFX individual currency indices, which are displayed in chart form. Their platform has indices for USD, EUR, GBP, AUD, CHF, NZD, CAD and JPY.
This is the first time I've seen currency strength displayed as a chart and, imo, it looks to be a very promising tool. I opened this thread as a central location to discuss the possible uses of these SIG charts. One method, as mentioned above, is the way billbss is using divergence between the index chart and a corresponding pair, and he seems to be on to something. In my case, applying stochastics and S&R levels to each index helps to identify correlated oversold/overbought areas and high-probability trades in the corresponding pairs. See the screenshot below.
I'm sure there a number of ways we can take advantage of this user-friendly way of viewing the overall market and any and all input is encouraged.
Mike
This is the first time I've seen currency strength displayed as a chart and, imo, it looks to be a very promising tool. I opened this thread as a central location to discuss the possible uses of these SIG charts. One method, as mentioned above, is the way billbss is using divergence between the index chart and a corresponding pair, and he seems to be on to something. In my case, applying stochastics and S&R levels to each index helps to identify correlated oversold/overbought areas and high-probability trades in the corresponding pairs. See the screenshot below.
I'm sure there a number of ways we can take advantage of this user-friendly way of viewing the overall market and any and all input is encouraged.
Mike