Hello,

I tried it on demo for ERUSD symble but out come seems to be accurte!

May I know if it works correctly on demo or not?

And what relative strength calucaltion method does this indicator use ?

Hi,

The indicator does work on demo. Calculations are done on a relative basis as each currency is compared to each of the other currencies. There a couple factors that may impact the results you see. One factor is the type of calculation. Another factor is the availability of accurate quotes.

Calculations are performed on a single time period. For example, you can select to use the daily time period. The current bid, high, and low prices are retrieved for each currency pair combination. A score is assigned to each currency in a pair based on the current bid's location within the high and low range. This process is repeated for all currency pair combinations. A statistical calculation is made for each currency. This is the final number that you see on the chart for the currency, i.e. EUR/USD can have numbers 4.0/2.0. Such a number means that EUR has a statistical calculation of 4.0 and USD has 2.0. This means that EUR is stronger than USD. The difference between the two scores is the relative strength.

There are two methods in which calculations are made. One method is to get quotes for all 35 currency pairs from the broker. This is the most accurate method for calculations because real quotes are used. The second calculation method is to only get quotes for the primary 7 currency pairs. In this method, quotes for the remaining 28 pairs are estimated.  This method is less accurate because some quotes are estimated in a synthetic manner. The results using both methods are similar but not exactly the same. It is highly recommended to use the raw method of calculation. Only use derived method if your broker does not provide quotes for some currency pairs.

Another factor that may impact calculations is the availability of accurate quotes. First, you should make sure you a re subscribed to all 35 quotes required to calculate relative strength. This includes all combinations of AUD, CAD, CHF, EUR, GBP, JPY, NZD, and USD. If your broker does not provide quotes for a certain pair, such as CAD/JPY, then you should use the derived calculation method. If using derived method, then you will only need to subscribe to 7 pairs: AUD/USD, USD/CAD, USD/CHF, EUR/USD, GBP/USD, USD/JPY, and NZD/USD.

Sometimes, your broker may not provide a certain quote when currency strengths are calculated. This may happen on some ticks but not often. In this case you may see a relative strength of '0'. This is rare and will usually be corrected at the next calculations.

Hopefully, this helps clear up your understanding of the calculations. Let me know if you have more questions.

Rich.

There is some clarification for the above reply. The actual number of currencies used for calculations is 8 and the number of currency pairs is 28. The following 8 currencies are used:

• AUD
• CAD
• CHF
• EUR
• GBP
• JPY
• NZD
• USD

All combination pairs of the currencies are used. The currency pairs used are:

• AUD/CAD
• AUD/CHF
• AUD/JPY
• AUD/NZD
• AUD/USD
• CAD/CHF
• CAD/JPY
• CHF/JPY
• EUR/AUD
• EUR/CAD
• EUR/CHF
• EUR/GBP
• EUR/JPY
• EUR/NZD
• EUR/USD
• GBP/AUD
• GBP/CAD
• GBP/CHF
• GBP/JPY
• GBP/NZD
• GBP/USD
• NZD/CAD
• NZD/CHF
• NZD/JPY
• NZD/USD
• USD/CAD
• USD/CHF
• USD/JPY

If you subscribe to all the above pairs, then the indicator should work properly. Some platforms do not have all the pairs available. In this case, you need to subscribe at a minimum of the following 7 pairs:

• AUD/USD
• USD/CAD
• USD/CHF
• EUR/USD
• GBP/USD
• USD/JPY
• NZD/USD

In addition to subscribing to the minimum number of pairs, you need to set the indicator parameter to use the derived mode. This will have the effects as described in the original post.