It checks our real time forex data every minute and determines the current strength. Any changes will appear if you refresh the page.
Knowing the relative strength for each currency is key to being a successful trader. This indicator helps traders determine which trading pairs are strongest or weakest on various time scales. This information will be a tremendous advantage for traders. The Currency Strength Indidicator is fully configurable, and was designed to maximise trading success.
The Admirals Forex correlation matrix above shows the correlations between the following currency pairs:
Knowing which currency pairs gives you the best chance of succeeding as a trader is essential. Our currency strength meter provides a quick overview of how each currency is performing in the Forex market.
The meter takes readings from every forex pair over the last 24 hours, and applies calculations to each. It then bundles together each the associated pairs to an individual currency (eg, EUR/USD, GBP/USD, USD/JPY, EUR/GBP, AUD/USD etc) and finds the current strength.
It is clear that the US Dollar and Japanese Yen are strong. This means that trading long USD/JPY Forex pairs offers low risk trading opportunities.
It is useful as a quick guide to which currencies you might want to trade, and which might be worth staying away from. For instance, if a certain currency is very strong, and another suddenly turns weaker, you may find a trading opportunity. Such deviation between pairs usually indicates momentum. Conversely, if two currencies are weak, strong or average strength, there is often a range or sideways movement happening. You might want to stay away from trading those pairs.if
These charts indicate which currency pairs have seen the greatest price swings. These charts allow traders to choose the Forex pairs that provide the best trading opportunities.
In the first pair, the GBP is the quote currency (meaning long trades expect the EUR to strengthen against the GBP). In the second pair, the GBP is the base currency (meaning long trades expect the GBP to strengthen against the USD). This means a long trade in the EURGBP is one that expects the GBP to weaken, while a long trade in the GBPUSD is one that expects the GBP to strengthen.
As an extra confirmation, professionals recommend that you use a forex strength measure.
What might also happen is that one of the pairs indicates a strong movement, while the other is just ranging, which signals traders to avoid entering trades with correlated pairs in the opposite direction. For example, if the EUR/USD is witnessing a downtrend, and the GBP/USD is ranging, a trader should avoid going long on GBP/USD, which carries a higher downside risk due to possible USD strength.
It shows you the current currency strength. This helps you make trading decisions, or to verify signals from other indicators. However, it does not provide a complete "feel" of the market. Therefore, we use it along with long-term indicators like MACD and SMA.
When it comes to currency strength, because there is such a high correlation between the two pairs, we can assume that the GBP (the common currency between the pairs) is the one that is driving these movements, and therefore the GBP is the strongest currency in this example.
If you have any questions or suggestions regarding the functionality and operation of the currency strengthmeter, please do not hesitate to get in touch with us.