Commonly used indicators in forex
App displays rate of change strengthening and weakening in relation to the other s as chosen by the user. Percentage change of individual Forex pairs is calculated and then subsequently grouped with like kind. The rate of changes are then aggregated to produce a percentage change for each of the eight groups. These eight rate of change aggregations are then plotted on the chart together which allows both quick comparisons and in depth analysis to be made of the underlying currencies. This page and entry level application here is intended only as an introduction into the measurement and analysis of currency strengths. It is intended as a very quick, no hassle way of seeing what is happening in the total Forex majors market. For instance at London open or New York open or New York equity open at the bottom of the second hour. Or very often for returning users over the years, upon a high impact economic release like NFP to obtain a general idea of flows. So, the strength chart above is intended to provide a general idea of general flows or drastic sentiment changes. As noted if this is in fact your intention, please obtain actual professional tools that use streaming data. That is of course, if you do plan on making a career of this trading thing. You are in an introductory research phase. Until a tool or method is deemed viable or at least possibly viable, it makes more sense to keep scanning the internet trying out free iterations. But, it is assumed researching traders that do find this type of tool and its type of analysis useful would then surely seek to graduate into a more robust, full featured application. As such, when an apprentice carpenter finally concludes that a hammer or saw are in fact both highly useful in the carpentry profession and always will be, he or she finally commits to purchasing their very own tools for the toolbox. Or as opposed to another questionable, odd insistence that all tools should always be free? Sure, there are recompiles of the old XMeter found on the scam MT4 App Marketplace from the scam sellers there. These basic tools combined introduce the ability to now trade and manage many more FX Pairs, BitCoins, CFDs, Commodities, Indices, Futures, Bonds, Bunds, and Traditional Forex Options. The diversification, variance, and risk reduction these tools allow for should truly provide infinite realistic dividends throughout an entire career. OBOS on lower time frames is generally best at serving as areas to begin thinking about taking some profit in a percentage of units. These trend length relative overextensions and OBOS areas on higher time frames serve as possible indications for mean reversion strategies or to hedge risks. In depth observations of mean reversion on the Weekly time frame is provided further below in the last section. The strength index chart in turn gives us money flow into or out of one major currency in relation to the seven others. There is an overwhelmingly high inverse correlation that takes place. The same applies to most all other CSMs. But as we know, the world and Forex market is comprised of more than just these eight major regions and currencies of course. This formula and most other CSM formulas are not including such pairs as EURHKD, USDRUB, USDCNY, or GBPSGD as examples. Therefore, this perfect inverse correlation and zero sum property does not apply in reality outside of these applications. But in large part as measured in total yearly FX volume, proceeds received from selling a particular major eight currency is immediately used to purchase any combination of other seven major currencies
. CERCSI is a completely new measurement providing Zero-Lag correlation strength. Unless your trading or analysis specifically only calls for the same one or two currencies to be measured, the max number of currencies selected is recommended to provide full and consistent relativity. Over time, this will prove beneficial by eliminating what can appear to be extreme moves of which may cause unjustified resulting action. This assumes that the most popular method to analyze these strengths is by constant visual comparison of the lines in relation to each other and in indicators to the top and bottom boundaries of the chart box. Rather than constantly comparing the numerical percentages. Minimal currencies are set here by default to help minimize initial page load speed. However, the opted formula here always uses all twenty-eight pairs worth of data available regardless of how many currencies are selected by you. This helps to retain familiar relativity when making visual comparisons and provides a consistent visual scale. The vertical scale is variable. These new Operas use Blink or Web-Kit, a form of Chrome
which is also fine. If you are viewing on a smaller monitor, the Light Box will automatically overly under-size and crop the meter. Might work even better on Internet Explorer as I think zoom can still be custom. Then after popping the lightbox, utilize the browser zoom to fine-tune the size within these dual displays. There is a fairly large group of visitors here who use the currency index every day. They have continued to do so here for about one to three years. That the values and line levels had changed since the initial viewing five to six months prior. Regardless of which size chart is chosen to view, the total look back period remains the same. So for example when H1 is chosen, strength is always measured across a rolling thirty trading day period or about rolling hours. When D1 is chosen for example, strength is always measured and displayed across a rolling trading day period. Chart history is changing after periods of time because the starting point at which strength is measured from has changed. Because the total look back period has remained static. This remains true even directly after pressing one of the time frame buttons, it is assumed. Notice how the button becomes smaller once pressed? The time frame selected is a tad shorter vertically. Once a time frame is selected, it will become a tad shorter vertically as illustrated in the pictures below and as seen on the actual strength chart. The top picture has the 15 Minutes button pressed. The lower picture has the Daily time frame button pressed. Meaning, not any given single trade. An extreme, preferably extended sharp angle seems to indicate the introduction of Real Money Flow at and from that point. A GANN GRID supplied in all MT4 Platforms is commonly used for angle measurement and relativity on Metatrader 4 currency strength indicators like our old FlowMeter. Historically, continuation is high probability when these sharp slopes appear. This probability increases as the time frame increases assuming apples to apples comparisons with the angle and length of initial sharp slope being equal in relative terms. An illustration of this higher probability opportunity for momentum and swing traders is included below. The event indicators pointed out with color-coded arrows showing an initial sharp angle jolt from the bottom and slightly-sharp turns down from the top. Or, using theses common retracements to re-enter by replacing some units that may have had their take profits quickly taken out. Slope Angles
mean something Sharp angles spiking from extended consolidation will often mean something even greater. This example offers adequate continuation space. Ideally, GBP would have been spiking up from a much lower oversold level. The slope angle percentage outweighs a lack of follow through space on strength charts like this. Sharp slope is actually representative of something Real Money Flow. Which means, it actually commonly something to most global professionals. These crossing lines, regardless of actual degree angles they form, are being promoted as some sort of magical phenomena. Many CSM software sellers and FX Forum Elite Members recommend using commonly crossing-line prompts as a main or only strategy. Presumably intended to be repeated indefinitely using the same crossing cues each day. What in the world does lines crossing on an obscure CSM Indicator of which uses a uniquely-proprietary strength algorithm with formula settings that can be modified and tweeked by each user
. It is a chance happening representative of nothing, in general terms. Sure, it could sometimes represent massive money flow and opportunities in one or both underlyings. But if massive incoming or outgoing flow is the entry parameter, then make this the parameter. By measuring angles, not crosses. Then why do so many vendors and so much marketing across the Internet advertise intraday buy sell signals solely upon some simple graphical output occurrence of some proprietary tool or proprietary modification? Like, for example, crossing of squiggly currency strength lines anywhere within its window at any slope? Because, exactly like us, these vendors probably receive emails by the hundreds from customers and potential buyers endlessly seeking an easy binary solution. As if this actually exists or is actually possible
indicators term New Retail traders believe a short term, intraday, technical, repeatable, binary method exists because vendors across the Internet all advertise and have always advertised that it does exist. Nearly all of them. Nearly every commercial site or commercial listing we have all stumbled upon over the years advertise some form of a simple green light, red light system. Every one of these magical commercial Indicators or EAs is able to exploit some secret, overlooked technical glitch in any market to produce a binary signal of buy or sell at any time during the day. Regardless of any fundamentals. Adding to it, these thousands of unique applications are nearly all different with their modes of action. But yet, somehow magically each exploiting its own unique discovery of a market glitch to produce windfall profits for all who install Customers demand these exact binary short term signals. And most importantly, appear simple to apply. Our brains subconsciously-aggregate all of this scam marketing to equal factual reality. Tell me exactly when to Sell. I want to outsource my decisions. I want to outsource my thinking altogether. When we try to use technical trigger points from proprietary tools with black box formulas and settings, we are completely removing arguably the most important equation factor. They are obviously proprietary and somewhat black box. Towards the beginning of the time period measured, a sharp move down around October 22, is also shown. Predictably this sharp slope down again forecasted the sustained move lower. Like the GBP shorter term example further above, it again provided a decent quick retrace as a second opportunity for some late entries or replacements or adding to. Or as we like to view it, the ability to diversify entries over a wider time period greatly reducing potential risk of getting caught chasing these first spike moves. View the additional yellow CHF line as merely additional, interesting information. Increasing our risk threshold per pair and increasing our take profit goals will help allow trading more in sync with the institutions. How do we know they even want us as friends? Well they are letting us follow them around everywhere they go just a few steps behind. They are even leaving a breadcrumb trail just for us. So then to keep up we need the same longer term outlooks and take profit ranges. We reduce effective per position leverage by trading from a larger pool. Per decision risk is reduced by increasing number of entry and exit units per position. Jumping onboard using the same daily charts with same key levels and same key moving averages allows for clarity of charts and clarity of objective. All the noise and meaningless technicals from all of the shorter time frames just fall away. What we are usually left with then are obvious, sustained megatrends most everywhere we look. Now we can make decisions based on the obvious patterns and clear trends we see directly on the chart. Instead, we can just learn to make high probable and logical decisions based on what we see the Institutions doing directly and clearly on our charts. Maybe we all inherently believe that luck will be on our side, by default? Maybe this unwavering optimism and hope has been bred used our DNA. Despite astronomical odds, we are all lucky enough to be alive right here, right now, at this exact moment in history? Well then surely this incredible generational luck will carry over into something as simple as capturing 10 pips in the EURUSD a few times each day. Yeah Surely Cuzz I mean why would this long sustained trend of uncanny luck my ancestors and I have enjoyed through millennia
stop right now, all of the sudden? FX, above all other markets, is reliably susceptible to daily, weekly, and monthly mean reversion of both buy side and sell side due to zero sum theoretical logic with week and monthly presenting lowest risk. Well actually, while week and monthly offer the lowest risk as it is defined here because we are specifically discussing the above strength chart that includes a fixed width property, this is not necessarily true of time frames in general. It is not the action of increasing time frames that reduces risk linearly. Risk is reduced when we are taking action in and around EXTREME support or resistance areas. Accordingly then, the support and resistance levels with the longest lookbacks offer the lowest risk. So, if the chart or your view of the chart has a fixed width, like in the above index chart, you are more likely to see the highest resistance and lowest support if the time frame is higher and the zoom is the least. Hence, higher time frames present us with the lowest risk opportunities. Since I do not personally intend on holding positions for 7 years to 20 years, let us consider the weekly time frame as the highest rather than the monthly. Also with many brokers providing MT4, their monthly data tends to be severely lacking. We are lucky if we can get bars, even in USDJPY. Amount of weekly history available usually gets us back to at least But, while your weekly charts beginning some time in the s should be sufficient in establishing highs and lows, I still have access to a library of max charts from our traditional brokerage ETrade. There are plenty of free resources like Google or Yahoo Finance and CME. This is definitely suggested before ever building mean reversion positions from what appear to be absolute highs or lows. While this strength chart is a good introduction tool into mean reversion methods and a nice, quick reference to get a general idea of possible opportunities in the underlying currency as a whole, it is obviously recommended to study actual individual pair charts before making any decisions. Somewhat because of what was just noted. But primarily, because once we start analysing extreme support and resistance levels like this that may be 3 year, 5 year, 7 year, 10 year, or even 15 year highs and lows they actually tend to hold up fairly well regardless of the actual pair. Meaning, minor pairs such as GBPZAR tend to comply with multi-year support and resistance levels as well or good as GBPUSD, GBPJPY, EURUSD, EURJPY, AUDUSD, USDJPY, for example. But on lesser used highs and lows such as one month or even one year, I am often cautious and leery about relying on and creating huge blocks of limit orders at these support and resistance levels to build a position from. Now, adding to an in-the-money, multi year position on a retracement to these levels? Taking some profit at these levels? Inflation adds an additional variable. That is, the culmination of longer term inflation building up. I never apply mean reversion techniques to SELLING commodities or equity based CFDs or anything else equity derived due to longer term inflation factoring. The inflation variable is like an impurity that can never be filtered out or neutralised. It is like having the wind at our back. Though at only about 3 kilometers per hour, it is more like a light breeze. Better than a vacuum though, pulling us in the wrong direction. But, it still creates issues when establishing Long positions and increases risk in and around these entry areas. This varying inflation variable renders multi-year resistance levels unreliable. And so then when creating huge blocks of limit sell orders in and around and up to these levels with huge blocks of stop losses then just above, reliability is a necessity. Likewise then, support levels need to be adjusted up when buying. Longer lookback levels need to be forex the most, recent not as much. There is much less potential for position establishment issues however when figuring and situating buy limits. Because I never actually move support levels up in an effort to account for inflation, it tends to mean that I will just not end up with as many units as preferred, rather than having an entire position stopped out immediately which would happen often if selling. But then what does this also mean when establishing these Long positions? Risk is increased for the time period immediately following the lowest entries that ideally were the initial. Because support levels are never actually moved up in an attempt to accommodate as noted, huge blocks of stop losses need to remain below these non-adjusted levels. This forces an increase in the total amount of susceptible loss. The exact inflation adjusted support level is unknown so therefore we are forced to use the lowest known level ever to calculate and set our ultimate stop losses. Not swing trades lasting only a few days or few weeks or even a few months. Though, the intended hold times do not really matter as it relates to the reliability of major support and resistance. It is about the reliability of multi decade levels that have not been inflation adjusted that are the limiting issue. Even if to 3 month swing trading was being pondered, the resistance level being used to establish a short position may be a 20 year high, for example. Also keep in mind, weekly mean reversion is not being suggested as a primary method for the large bulk of trade volume. The actual number of opportunities within a ten year period can be slim. Although, this past decade presented above average number of opportunities in comparison to past decades and presumably future decades. Primarily because this past decade included that Financial Crisis and its extended distancing from the Mean in nearly all markets. As forex in other parts of this site, a separate broker or separate account is used only forex mean reversion. If an additional broker is not the solution, a spouse or corporation can be used to create an additional account within the same Broker and a separate MT4 instance on separate machine. This will help tremendously in keeping methods and your daily trading activities separate. Additionally to organization used clarity, brokers all have different strengths and weaknesses. Certain subsets of brokers and broker types are more ideal for certain intraday styles of trading requiring a small number of pair offerings and razor thin spreads, for example. Others may have increased spreads but also increased offerings. Others may handle rollover uniquely, providing an advantage or disadvantage for swing trading. Expanding the pool of instruments traded will greatly increase opportunities while reducing risk. All symbols offered by this particular broker AvaTrade in its market watch window are all being sifted through for possible upcoming opportunities. This glut of broker offerings might actually be the key in ensuring long term viability of this mean reversion method. And possibly, what gives it viability in the first place. It would be foolish to even contemplate this type of strategy via a single broker with only FX pair offerings. The lack of opportunities would inevitably force high risk decisions leading to Martingale account destruction. But what about high spreads in some of those Minors, Exotics, and EuroZone CFDs? Well, with potential actual and equivalent gains in the to pip range, spread costs are seldom dictating any decisions. Neither are carry costs. Many instruments and thus lower capital used per will lower risk by allowing for much more patience. More patience to endure the often grueling wait until extreme levels are tested. Patience to then meticulously build positions at these extreme levels as consolidation forms bases. Or in addition, the confidence and increased risk threshold to have large pre built blocks of buy limits and sell limits patiently waiting there for when a quick spike down to or up to, and maybe not all the way to
is the only opportunity actually provided every 5 years or so. Spreading this method across as many instruments and different markets as possible allows the core theory and probabilities to eventually play out in our favor. It gives the theory room to breathe and room to eventually reward our patience and longer term capital investment. One of the caveats of using a fixed width tool like this is that the past can change sometimes drastically. After the extended periods of time required in mean reversion researching, there is a different set of of parameters that recent rate of change is being compared to. This repainting of the past is discussed in that sub section above. I think rather that is just the perfect example of why, while this fixed width strength chart is a good introduction and somewhat serves its purpose here of being able to show live real time Weekly levels and to gain a general perspective, using a non fixed width chart is obviously more ideal to make actual Weekly mean reversion decisions. Maybe not, but I would think this is possible through the settings. I am currently using our old FlowMeter Currency Strength Meter for MT4 on a daily basis for Weekly, Daily, and H4 based position trading. Like noted above, the pair charts themselves are used as main reference and last step decision making. Martingale Nightmare Though because this standard CSM formula peaks out at and bottoms out at 0it seems there might be a false sense of security generated because of these virtual tops and virtual bottoms This leads almost to an inevitable forced Martingale commonly being deployed more often than not as strength readings hover horizontally along the tops and bottoms for extended periods of time. Price continues to move against us. This nightmare is why we also need the definitive guidance of actual price support and resistance levels, rather than the virtual guidance and virtual limits of nine and zero from an obscure tool that the majority of worldwide professional traders are not looking at. The entire market has plans in place to take action once approached. These extreme levels are always pre disseminated by nearly everyone. Everyone and their computers. Obscure CSMs do not lead to this same self fulfilling type of response from the markets. Nine and zero are only pre disseminated by a handful of people, mostly retail. In other words, analysts do not come on CNBC or Bloomberg advising that viewers
. This legacy CSM with smoothing mechanism is named FlowMeter. I and many customers dating back to around are using it. Other than Weekly Mean Reversion opportunities which can easily be gathered from the CSM on this page, I personally utilize CSMs as more of a 28 chart aggregation tool. I need to get a general idea of the entire FX market in one spot with just a glance, so the older FlowMeter suffices. I know what is in the code, so I know the output is perfect. But a new CSM will get done eventually. Just not right now. Multiple display configurations and output types is the goal. Ease of use and RAM CPU friendly is a must. Constant position changing Dynamic Rankings to instantly identify strongest vs. Sort of like a Heat Map that is constantly ranking itself from top to bottom. For anyone who has used this Top Gun software on eSignal in particular that specific CSM template, then you know how useful these instant rankings can be. This information can be especially useful for short term, intraday traders continually seeking to match strongest versus weakest as soon the opportunity presents itself. Primarily, following fundamental events such as NFP or the London and New York opens each day. However, once the base meter is split into a series of indicators the possibilities for display combinations is increased. These tools are complex and resource intensive. This is assuming about 2 ticks per second on average over that entire 15 minutes following release. As we all know, the initial minutes can produce as many as ticks per second on pipette Brokers. This does not include the additional, whatever automatic internal calculations that are performed per each new tick by the 24 internally-aggregated Indicators themselves such as ADX, Alligator, Accelerator, Awesome Oscillator, etc, etc. These calculations are done automatically within your Metatrader Platform, but only when they are instructed to do so. Number of time frames used for calculation is dependent on time frame in which the meter is loaded or time frames that the User has selected from the drop down list from within the settings. Strength Lookbacks can also now be adjusted which will also have an affect on the response. But, we have to plan for Users wanting to run both at the same time, and possibly on a different set of pairs. This then would push calculation-per-second into the about 25, ,000 range. Not really sure what this means yet. View Fifty-Five Screen Shots of the Fifty-Five Templates Included Free Need Help? We Reserve Intellectual Property Rights. Resell Rights Are Not Granted for Any Product. Distribution of Any Product Here is Prohibited. We Actively and Aggressively Pursue All DMCA Rights Granted to Us. No Refunds Granted for Any Reason. We Do Not Sell Magic We Do Not sell software that will transform bad traders into good traders. We Do Not sell systems. We sell MT4 Indicators software that calculates and displays aggregated information from multiple time frames. Software here not intended to be sole source of decision making information. Perceived positive results in educational illustrations throughout site not typical. Price movement and the resulting price charts in illustrative videos throughout site not indicative or typical of all price movement that will occur in future. Markets are not pre-programmed as video games are. This includes any upgrades or updates whether proactive, as a courtesy, or that are functionally necessary due to new platform builds. If you have not received scheduled upgrades and feel this decision is errant, evidence of the violation or violations may be provided to you upon request.
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