{quote} There as been a lot of fuss over Strength Meters recently, never really interested me, thinking that they just follow price, with this in mind I have set my charts up in groups ie the Gbp pairs or the Eur Pairs etc etc then I have the setting as we know, now all I have added is a simple moving avg (5) as we are looking at a 4 bar cluster, all I am using it for is to gauge the overall strength of the main currency, what it shows to me is that Nzd is strong but the Eur is strong to, it looks as if it would have been better to have traded another...
Currency strength determination is a highly relative pursuit.
What we as traders never really know is how long a given currency will remain 'strong' or 'weak' !
Over what predicted time horizon? ... 5 minutes, 15 mins, 1 hour, the rest of the day or into the next month ... no-one knows.
The main reason is because 'world' events can change suddenly and before you know it the market is selling off a previously strong currency because war has been declared against their nation.
A drastic example, but less drastic events can also have a significant impact on the 'strength' or 'weakness' of a given currency at any given time.
The twitter account ramblings of a head of state for instance can move a currency and move it fast.
I have only ever really applied currency strength in very short term trade setups typically M1 and M5 or on lower tick charts of different platforms.
However, a keen observer of PA, bar by bar, candlestick formations and patterns and observing the momentum of price on a relatively bare chart can provide all the information from a technical perspective that a trader needs to get into or out of a position.
PA is king for a reason ... but so too is keeping in tune with market developments!
Good trading,
Masterrmind............
Master your Mind then Master your Trades
