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Individual Currencies & Relative Strength

  • #101
  • Oct 18, 2008 9:03pm Oct 18, 2008 9:03pm
http://i37.tinypic.com/20ic4s4.gif

Interesting idea.
  • #102
  • Oct 19, 2008 8:46am Oct 19, 2008 8:46am
Can you show us the indicator that shows the strength of the pairs ?
(like the one that shows in your chart ?

Quoting PipClipper
http://i37.tinypic.com/20ic4s4.gif

Interesting idea.
  • #103
  • Oct 19, 2008 9:11am Oct 19, 2008 9:11am
Thanks for providing this link!

Quoting qz10cq
BB, that thread has been closed here is the spin-off

http://www.forexfactory.com/showthread.php?t=116412

All you guys from here please go there, there's a couple indicators there that are very useful in this strategy and besides they need your brain power there cause there are some sharp ones here.

Best regards guys and thank you...
  • #104
  • Oct 21, 2008 3:06am Oct 21, 2008 3:06am
Quoting BeachBum
Just use one pair in each window
yes it's true it's very commod to use and analyze each currency in one window to don't be confused. It's a good method to trade but I think at all moments we have to use a sistem of methods not only one.
  • #105
  • Oct 23, 2008 9:54am Oct 23, 2008 9:54am
Clipper,

Which indicator do you use? Thank!
  • #106
  • Nov 1, 2008 5:53am Nov 1, 2008 5:53am
Could someone direct me to where this indicator is
Attached Image (click to enlarge)
Click to Enlarge Name: 20ic4s4.gif Size: 14 KB
  • #107
  • Nov 1, 2008 10:01am Nov 1, 2008 10:01am
This screenshot was posted by a former member who regularly drifts in and out of Forex forums using a new alias each time (and stirring up trouble as well). I think I know the source of the indicator that interests you and if you don't know who I'm referring to, send me a PM and we'll talk about it.

Quoting toddanderson
Could someone direct me to where this indicator is
  • #108
  • Nov 9, 2008 10:47am Nov 9, 2008 10:47am
Quoting Forexharry
I hope you don't mind if I show you that you are incorrect. First when I starting working in this concept seveal years I also thought the same thing as you stated above about the eur/usd and usd/jpy. To start with very few actually don't know how the price of the eur/jpy is arrived....
you were referring to cross pairs on the 2nd paragraph
for eg:
EUR/AUD is a cross pair and it derived from EUR/USD times USD/AUD
AUD/JPY is also a cross pair

we can simply get EUR/JPY by directly check the USD quotes for each currency ie the EU and UJ, thus only newbies play the cross pairs and it serves as a goldmine for the brokers as they charge more spreads for cross pairs compared to USD pairs

every single pair IS being compared to USD either directly or indirectly


OK now for a more serious talk

what'd happen when some local bank, say Indonesian Central Bank convert 20% of its USD reserve to EUR? how would that affect the exchange rate?

the only local exchange rate is USD/IDR which is around 11,000 at this time

the EUR/IDR is simply EUR/USD times USD/IDR which is 1.2715 * 11,000 = 13,986.5

technically speaking the convertion would weaken the USD and we should have stronger IDR at say 10.750 or USD/IDR = 10,750

the EUR/IDR calculation would be (with assumption of flat E/U)

1.2715 * 10,750 = 13,668.62

or the EUR/IDR is actually weakened too, (the IDR is also getting stronger even when compared to EUR) eventhough theoretically the EUR should be getting stronger after the convertion or is it not?

what would logically happen is that after the convertion the E/U should actually goes up to say 1.2750 (which is a reasonable rate after the convertion) and that should bring a new calculation

1.2750 * 10,750 = 13,706.25, still at this rate the EUR/IDR is actually go down

eventhough my calculation are all arbitrary but at least it should serve to general readers a good idea to get the 'real power' of USD over the rest of the currencies, the next question is how big should the convertion in order to have EUR to gain over IDR?

you can check this with your local bank for affirmation, I have no idea where this kind of calculation came from originally.

so as a conclusion (or my conclusion)

1. this whole currency exchange calculation is absurd
2. when you switch from GBP to EUR, it won't automatically strengthen the EUR, only if you switch from USD to EUR that you make significant impact on the exchange rate and this apply to the rest of the world's currency
3. the exchange rate govern most of the import and export activities
4. import and export govern most of the industrial activities esp for non-US countries with low GDP
5. so US still actually able to control the world's economy only through by controlling its currency

PERIOD, accept as it is lol
  • #109
  • Feb 3, 2009 2:47pm Feb 3, 2009 2:47pm
Quoting Gift_Art
you were referring to cross pairs on the 2nd paragraph
for eg:
EUR/AUD is a cross pair and it derived from EUR/USD times USD/AUD
AUD/JPY is also a cross pair

we can simply get EUR/JPY by directly check the USD quotes for each currency ie the EU and UJ, thus only newbies play the cross pairs and it serves as a goldmine for the brokers as they charge more spreads for cross pairs compared to USD pairs

every single pair IS being compared to USD either directly or indirectly


OK now for a more serious talk

what'd happen when some local bank, say...
That is one thing that I'm confused about, why does the new CCFp indicator other RSI indicators calculate it's currency strength of each one (GBP, JPY, CAD, etc) against the USD only? To get the true accurate strength of a currency should we not calculate it's strength on all the combo of pairs it touches?
24 hours in a day – 24 bottles of beer in a case – Coincidence? I think not
  • #110
  • Aug 4, 2010 9:50am Aug 4, 2010 9:50am
Quoting capitalist88
I just updated today's chart on my site, and thought I'd reproduce it here. It's a pretty simple idea, but here's what I look at:

Attachment

I also use a similar approach with news releases to try to get a read of how fundamental pressures are building in the market, but that's a bit more involved with regard to calculation. I'll be making that available on the site soon too.

Being able to get the FF calendar data into Excel helps a lot though. Thanks Merlin!
Hi Capitalist88,

Is the picture show in an excel spreadsheet??
  • #111
  • Aug 9, 2010 1:01am Aug 9, 2010 1:01am
Hi.. I dont know if this can help,but I sometimes uses Forex flow indicator which is based on Relative and absolute currency strength for every individual currency.So you can select currency pair with the highest and lowest relative strength for example..or you can use absolute currency strength which shows you gain or loss in percent. on selected period.On the picture is only relative currency strength
Attached Image (click to enlarge)
Click to Enlarge Name: flowindi RCS.png Size: 67 KB
  • #112
  • Dec 15, 2010 8:00pm Dec 15, 2010 8:00pm
MichaelP, could you gently share with us your RCS Forex Flow indicator?
Thanks
Humble & Kalcker CLO2 = Covid killer
  • #113
  • Mar 18, 2013 12:34pm Mar 18, 2013 12:34pm
Messing around with creating some tools to plot individual currencies. Usually I try to take things and plot them in a tabular format. Still looking into the idea initially though. Basic plot of 8 majors in this screenshot. Can plot over any lookback period, or stack multiple look back periods on top of each other.
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-03-18_122248.png Size: 48 KB
  • #114
  • Mar 21, 2013 4:25am Mar 21, 2013 4:25am
Quoting Pipsqueak4x
Hello BB and FXsurfer,

I am usually very quiet and make my way through the forums and rarely post because in the I don't have the time it takes to considerately reply to all the posts that result from a deep participation. But I would like to make a few comments here about correlation trading that may bring a greater understanding on reading the strength or weakness of various currency pairs. If you already know these things I don't mean to be redundant. This is a fairly quiet thread, the way I like to share, and for a few stray readers this might...

Excellent! Thanks Pipsqueak4x , now I got how to monitor currency pairs...very helpful guidelines for newbies.
  • #115
  • Mar 22, 2013 9:34am Mar 22, 2013 9:34am
Quoting Red Herring
Excellent! Thanks Pipsqueak4x , now I got how to monitor currency pairs...very helpful guidelines for newbies.
Howdy.

I have a few questions on Individual strength as well. Not sure how active the participants are, but I'm attaching some custom things I've done to begin to monitor strength. I've created a basic strength meter, which is shown in the pics, you can see the individual strengths there. I dunno if it is correct, but just some thoughts i've had.

About HOW they've been created. I looked around, and I've seen several different types of calculations. One common calculations is using for example the Eur/Usd and the Usd/Aud and assuming that will give you the particulars for the Eur/Aud. I kinda am not sure about this? It makes sense, in that since you have the Eur, the Aud, and the Usd is common, that a useful relationship would be present, but I'm not so sure?

But I kinda think if one wants to find individual strength so that he can play the opposite strengths against each other, that particular calculation is more of a coincidence than anything else. It would seem the Eur/Aud moves strongly in a direction BECAUSE the Eur and the Aud are each moving in opposite directions. I kinda think the USD has nothing to do with the equation.... UNLESS one was using the USD as an isolator of some sort to find out what the values of the Eur and Aud are individually. I hope all that makes sense?

I've also seen some people use a similar formula, but apply a weighting factor to it. That also seems reasonable.

So just some thoughts.

But here you can see some chart movements, along with the strength as I'm measuring it right now. All you see there is the strength relative to a few different time horizons.... smaller up top, and larger down below. Also each graph is updated once per minute for various lengths of time.

I don't have a ton of research into these ideas, but it does seem like an interesting course of study.
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-03-22_092234.png Size: 137 KB
  • #116
  • Mar 22, 2013 11:51am Mar 22, 2013 11:51am
forrestang, I advise you read this tread http://www.forexfactory.com/showthread.php?t=334165
Humble & Kalcker CLO2 = Covid killer
  • #117
  • Mar 23, 2013 7:24am Mar 23, 2013 7:24am
Quoting forrestang
Messing around with creating some tools to plot individual currencies. Usually I try to take things and plot them in a tabular format. Still looking into the idea initially though. Basic plot of 8 majors in this screenshot. Can plot over any lookback period, or stack multiple look back periods on top of each other.
please post this indicator in the pic
  • #118
  • Jun 15, 2014 9:55am Jun 15, 2014 9:55am
Quoting euclid
Why not just chart each currency as an index? {image}
post this indicator
  • #119
  • Last Post: Oct 15, 2017 4:14pm Oct 15, 2017 4:14pm
Quoting justin7
{quote} post this indicator
Here
Attached File(s)
File Type: ex4 Relative_Currency_Strength.ex4   41 KB | 757 downloads
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