The Currency Strength Meter indicator MT4 displays the strength of individual currencies, comparing their performance with all other currencies. The indicator plots the strength of each currency in a visual color histogram as well as numerically. Forex traders can quickly identify bullish or bearish currencies to determine the best currency pair to trade. Trend following traders use a strategy to ride the trend by combining the strongest currencies with the weakest and continuously monitoring their strength.
This indicator is suitable for both new and experienced Forex traders. The indicator can be used to visually identify a bull or bear trend in a currency and its underlying strength. The indicator is also available as a free download and is easy to install.
Currency Strength Indicator for MT4 Trading Setups
The indicator displays the gauge at the bottom right of the chart. The indicator also shows currency strength in different colors, depending on its currency strength. Red means very weak, orange-red means weak, light green means strong and lime means very strong. The strength of the value is indicated by Sienna, and the name of the currency is indicated by DarkSlateBlue.
This indicator can be used by Forex traders to determine the strength or weakness of a currency. Forex traders can choose the strongest currency to pair with the weakest currency and then buy/sell based on that. A higher value of the currency indicates a more bullish price trend. Conversely, a lower value signifies a bearish price trend.
On the other hand, the strength of a currency is declining. Forex traders have two options: exit the trade, or write down some of their profits. If the strength of the currency is maintained, the trader can keep the position and follow the downward trend of the currency.
The indicator works on the principle that if one currency gains bullish momentum, the other will gain bearish momentum. Once a forex trader has identified a strong and a weak currency, he can buy or sell a currency pair and pit them against each other.
The indicator is compatible with all time frames, including intraday, daily, weekly and monthly charts. Forex traders can use the indicator to identify trends in higher time frames to determine the best entry or exit point in a shorter period of time. The indicator can be used for multi-timeframe (mtf) trading.
MT4’s Currency Strength Chart gives trading signals using colors. The best trading signal will work if the price bounces off a support level, resistance or channel. Forex technical traders can also trade this signal with other trend indicators.