Currency Strength Matrix
Strength indicator that reads price action to confirm trend and strength. Advanced multi currency and multi time frame indicator that shows you simply by looking at one chart, every currency pair that is trending and the strongest and weakest currencies driving those trends.
This indicator intelligently reads the price action of 28 currency pairs simultaneously in any time frame in real time, so you always know the strongest and weakest currencies to pair together. Currency Strength Matrix establishes a currencies true strength by reading price action and cyclicity to determine trend, the only true method for identifying trend.
The single most important factor in currency trading is each currencies relative strength. A major benefit currency traders have over traders of other markets, is that they can pre-select which two currencies they wish to pair together to give them the highest probability for a successful outcome. Without understanding a currencies core strength, the pairings you choose are less likely to succeed.
Currency Strength Matrix works with 8 major currencies (USD, EUR, JPY, GBP, AUD, CAD, NZD & CHF) which combined make a total of 28 currency pairs which you can trade using this indicator (check our screen shots below for full pairs list).
Each currency is ranked from +7 to -7 in each time frame. +7 indicating that a currency is in an uptrend against all 7 other major currencies with -7 indicating it is in a down trend against all 7 other major currencies. The scores change when a new trend is created or existing trend is broken.
How to trade using Currency Strength Matrix
Currency Strength Matrix can be used in conjunction with any existing trend strategy. Currency strength precedes a strategy, which means it will help you choose which pair to trade before implementing your existing strategy.
Tips to look out for.
- Pair together a strong currency with positive scores of 5, 6 or 7, with a weak currency with negative scores of -5, -6 or -7. These conditions will ensure you always trading with existing trend.
- Pair a currency crossing up through the 0 line, meaning it is increasing in strength, with another currency crossing down through the 0 line, meaning it is increasing in weakness. These conditions will have you trading at the midpoint of new trends.
- For early entry into new trends look to pair a strong currency which is losing strength (was a 7 and dropped to 6) with a weak currency gaining strength (a -7 that has just increase to -6). These conditions are the most aggressive but will have you trading right at the beginning of new trends.
- Draw Labels: With this setting you can choose to turn off all currency scores and Matrix table and just use the indicator lines.
- Draw Matrix: This setting allows you to turn on and off the Matrix table on its own. When set to true it will show on the top right corner of your chart.
- Label font size: You can choose the size of text in the Matrix table and currency scores.
- Currency Label Color (for grid): This sets the color of the currency titles in X and Y axis of Matrix grid.
- Data Label Color (for grid): This sets the color of the scores in Matrix grid.
- How many bars to calculate: Set how many bars should be calculated and this will set how far the indicator lines extend back in history. You can increase this number if you wish to extend history for back testing. We recommend a minimum of 50 bars.
- ATR multiplier for over-sized detection: This has been added to eliminate any anomaly/over-sized bars from the chart (over-sized bars greater than chosen ATR will not be counted in cycles analysis), so that we can still focus on the true cycles. The default ATR is 3 but this can be amended to take into account larger or smaller bars. We recommend 3 as a starting point for all users.
- Initial calculation frequency: This is the speed in which the 300 bars are read on first load. Can be adjust between 1 and 10 seconds.
- Final calculation frequency: This is the frequency in which the indicator checks price action for changes in cycles and therefore scores, after all bars have been fully loaded.