How to Use Currency Strength for Trading Success in 2023

15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

In the dynamic world of Forex trading, where fortunes can turn in a heartbeat, understanding currency strength is akin to having a compass in the wilderness of financial markets.

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What determines currency strength? This question is at the heart of every trade, a puzzle that traders continuously strive to solve. Imagine having a tool that not only unravels the mystery but also guides your trading decisions with precision.

This is where the Forex Currency Strength Meter, a revolutionary instrument that empowers traders by revealing the hidden currents of currency values, comes into play.

Moreover, this article is your gateway to mastering this powerful tool, a beacon to illuminate your path to trading success in the ever-changing Forex landscape.

Understanding a Simple, Powerful Truth

When it comes to trading currencies, our only objective is to pair a currency that is losing value with a currency that is gaining value to create a matchup that moves in a given direction.

In other words, if the Euro is gaining value (strong) while the USD is losing value (weak), then the EUR/USD will move upward exponentially, creating profit potential. Also, feel free to readย Warren Buffettโ€™s approach to currencies.

We know that the difference in strength creates this movement (shown above) that is required to make money in the currency markets.

However, it is incredibly difficult to scan through price charts and determine which currencies are the best to pair with one another. By looking at pair charts, you donโ€™t actually know which currencies are truly gaining value because it is all relative.

After all, how do we know if the EUR/USD is rising because the Euro is gaining value, the USD is losing value, or both?

The real problem here is thatย ifย the EUR/USD is only rising because the Euro is gaining value, for instance, then if the Euro quits gaining value, the pair will stop growing.

Whereas, if the EUR/USD is rising because the Euro is gaining value and the USD is losing value, the Euro could lose strength, but the pair could continue to grow solely on the USD, continuing to remain weak.

So, as you can see, pairing the right currencies is essential if you want the best chance of success. Also, read ourย best cryptocurrencies to invest in.

What Is the Currency Strength Indicator?

Currency Strength Indicator
Currency strength indicator

At the core of savvy Forex trading lies the Currency Strength Indicator, a tool that goes beyond conventional analysis to provide a more profound understanding of market dynamics.

This indicator doesnโ€™t just scratch the surface. It delves deep, offering a clear view of the real-time strength and weakness of currencies. Itโ€™s like having a high-powered microscope that focuses on the essential elements of currency value.

The Currency Strength Indicator works by comparing various currencies, revealing which are surging ahead in strength and which are lagging in weakness. Such insight is invaluable, as it equips traders with the foresight to make informed decisions.

Whether youโ€™re a seasoned trader or just starting out, this indicator is a crucial ally in navigating the Forex market. It transforms complex market data into an understandable format, ensuring youโ€™re not just following trends but leading with informed choices.

What Determines Currency Strength?

Unraveling what determines currency strength is like decoding the secret language of the Forex market. At its core, currency strength is influenced by a complex web of factors ranging from economic indicators to geopolitical events.

Key economic data such as interest rates, employment figures, and GDP growth play a pivotal role. For instance, a country showing robust economic health typically sees its currency strengthen. On the flip side, political instability or poor economic performance can weaken a currency.

Additionally, global events and market sentiment also sway currency strength, creating a dynamic and constantly evolving landscape. The trick lies in synthesizing this information, a task where the Currency Strength Indicator excels, translating these multifaceted factors into actionable insights for traders.

Understanding these underlying forces is crucial for Forex traders, as it empowers them to anticipate movements and strategize accordingly.

Quit Guessing about the Currency Strength Meter

What if there was a tool that instantly told you which individual currencies were the strongest and weakest so you could effortlessly make the correct pair? Well, the Winnerโ€™s Edgeย FX Power Indicatorย does precisely that!

The Forex Power Indicator (Fpi).
Fpi jul 29

As you can see, the Forex Power Indicator (FPI) individually rates each of the currencies so that you know the โ€œtrue strengthโ€ of a currency rather than just trying to determine its strength by looking at a price chart.

As you can imagine, this is a huge advantage when it comes to taking advantage of the most potent market trends. Weโ€™ve developed a strategy report called the POWER STRATEGY that you canย download by clicking the link in this section to learn how we use this tool.

Taking Advantage of the Forex Power Indicator (FPI)

The key regarding the Power Indicator is making sure that you combine the individual strength with other components because, of course, strengths are constantly fluctuating.

You wonโ€™t always win by just matching the strongest currency with the weakest one and clicking โ€œBuyโ€ because of the constant fluctuation in the market. We suggest using things such as trend lines, channels, Fibonacci retracements, Support and Resistance Zones, etc., to enhance the timing of your entry when matching up the currencies.

Another thing to remember when using the FPI is that there are several different time frames to work off. The FPI will evaluate the individual strength of a currency on the monthly, weekly, daily, 4-hour, 1-hour, 15-minute, and 5-minute time frames.

This allows you to not only take advantage of the FPI for all kinds of different trading strategies and styles but also to look for consistency in a given currency (for instance, if CAD is showing weakness on the monthly, weekly, daily, and 4-hour).

Moreover, this way, you can get an even better idea of which currencies have the strongest sustained value and are likely to continue in a given trend.

Weakness Across Several Time Frames Shows Consistency.
Consistency power indicator

This article covers a few primary advantages of the FPI. Still, we recommend youย download the Power Strategy for optimal use.

Overall, the FPI is a very simple tool but has incredible value. Remember, if you can pair the correct currencies together, you can create the maximum profit potential as a currency trader.

As I write this article, I am up over 800 Pips on a GBP/CAD trade that I used the FPI to find. You can see how powerful the trend is and how I took advantage of it.

800 Pips On A Gbp/Cad Trade Using The Fpi.
Gbpcad 800 pip trade

We highly recommend that you take advantage of it, which you can do for free as often as you like simply by streaming the data from our website. Consider bookmarking the link above so that you can return to the Forex Power Indicator anytime.

Also, feel free to read about theย traderโ€™s tech and installing MT4 EAs with indicators.

Three Things Currency Traders Need to Do Now

  1. Leave a commentย to let us know how you can use currency strength for trading success.
  2. Make sure toย access the free toolย and bookmark the link so you can use it all the time.
  3. Consider downloading our report and let us know what you think of it!

Conclusion: The Forex Currency Strength Meter

As we conclude our journey through the intricacies of Forex trading, itโ€™s clear that the mastery of currency strength is not just beneficial but essential for trading success.

The currency strength meter and indicator have emerged as pivotal tools in the endeavor, offering unparalleled insights into the ebb and flow of market dynamics. These tools are not just indicators but your strategic partners, empowering you to make informed decisions with confidence and clarity.

Embrace the power of these instruments, and let them guide you to new heights in your Forex trading journey. Remember, in the world of currency trading, knowledge of currency strength isnโ€™t just power โ€“ itโ€™s profit.

Thank you for reading!

Itโ€™s also a good idea to understand more about personality strengths and weaknesses in trading. Check out the article for more information.

Please leave a comment below if you have any questions on how to use the Forex currency strength meter!

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15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

26 Comments

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    • Hi Warren, thanks for the comment. Yes, we love this tool as a filter to get rid of the pairs that are most likely going to continue to chop around.

  1. This is indeed a cool tool, if you know how to use it. I try to use it from time to time, however I think it should be done systematically (lack of discipline). The way I use it as follows: I only look n large timframes e.g. Daily and Weekly (sometimes even Monthly, but not often). Because all other TFs are not consistent enough (under H4 strength really fluctuates a lot and is short-lived. When you actually see the results, itโ€™s often too late and the move is done). So I select the best 1-2 pairs which are present in both Daily and Weekly ratings and try to figure out where/when to enter. Using all my little arsenal of graphics (support, resistance, trend/counter-trend lines and fibs).

    • Thanks Piphunter for sharing that method. I think your strategy about using larger time frames can be done consistently over time to grow a profitable account. I hope the tool is valuable to you and if you have any other suggestions let us know.

  2. Thanks for sharing thisโ€ฆ it will definitely give me more confidence and help me determine to be a bull or a bear.

  3. This sounds as if it could be a very helpful tool, especially for someone whoโ€™s just now getting into the trading game. So, it seems to not only help you find the loss/gains of currencies, but the actual legitimate ideal pairs. Will definitely be checking this out. Thanks for sharing this.

  4. I am happy reading this article tonight, i am able to gain a little understanding because i started a training class on forex trading recentky.

  5. ON HOURLY TIME FRAME ADD VWAP INDICATOR WHENEVER PRICE COME NEAR VWAP TAKE BUY/SELL TRADE ACCORDING TO FPI SUGGESTION ON 4HR AND DAILY TIME FRAME OF A PARTICULAR CURRENCY PAIR

Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. No information or opinion contained on this site should be taken as a solicitation or offer to buy or sell any currency, equity or other financial instruments or services. Past performance is no indication or guarantee of future performance.