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TIL Currency Performance Meter

TIL Currency Performance Meter is an intuitive technical indicator for quantifying and visualizing the current momentum and relative strength of the eight major currencies, namely: USD, EUR, GBP, CHF, JPY, CAD, AUD, and NZD, on all timeframes. This is achieved by calculating and consolidating the price percent changes of 28 currency pairs from a certain point in time. The indicator generates a chart wherein each currency is represented by a color-coordinated bar that either shoots up or drops down from a common level (zero line). You can easily interpret the chart by observing the following properties:

Color: Each bar represents one of the eight major currencies. The default bar colors are as follows:

  • USD - Green
  • EUR - Blue
  • GBP - Cyan
  • CHF - Yellow
  • JPY - Brown
  • CAD - Red
  • AUD - Magenta
  • NZD - Purple

The arrangement of the bars in the chart is from left to right.

Position: Easily enough, the position of the bar tells you whether a certain currency is bullish or bearish.

  • Bar is above the zero line - this signifies a positive change in the currency's performance. The currency is BULLISH.
  • Bar is below the zero line - this signifies a negative change in the currency's performance. The currency is BEARISH.
  • Bar is very short (almost invisible) and close to the zero line - this signifies a neutral change in the currency's performance. The currency is neither BULLISH nor BEARISH.

Height: The relative height of the bar gives you a quick insight on how much the currency has changed over time.

  • Long bar - this means that the currency's performance has greatly changed over a given length of time. If the bar is above the zero line, the currency is extremely bullish. Likewise, if the bar is below the zero line, the currency is extremely bearish.
  • Short bar - this means that the currency's performance has changed only moderately over a given length of time. The currency is bullish (bar is above zero line) or bearish (bar is below zero line) but only to a less than significant extent.
  • No bar - this means that the currency's performance has not changed at all or has been stagnant over a given length of time. It is undecided whether the currency is bullish or bearish but it signals an impending breakout of a new trend.

The height of each bar is expressed in percentage - or rather, the percent change of performance of the currency; the actual value of which is conveniently listed at the left-hand side of the chart beside the currency label. By analyzing the bars collectively, you are instantly given a snapshot of the most recent state of the market in terms of the eight major currencies. Armed with this useful information, you can:

  • Intelligently gauge risk and confirm trades by looking at the bars that correspond to the base (first currency in a pair - EUR in EURUSD) and quote (second currency in a pair - USD in EURUSD) currencies of the pair you intend to trade.
    • For example, if you intend to go long in EURUSD, make sure that the EUR bar is long and above the zero line while the USD bar is also long and below the zero line.
    • For example, if you intend to go short in USDJPY, make sure that the USD bar is long and below the zero line while the JPY bar is also long and above the zero line.
  • Scout for potential low-risk trades by looking for the longest bar above and below the zero line.
    • For example, TIL Currency Performance Meter is on H4 and you see that GBP is the longest bar below the zero line and CHF is the longest bar above the zero line. You could say that this is a signal to go short in GBPCHF. However, if you move one timeframe higher (D1) and one timeframe lower (H1) and you see that in both of them GBP is still below the zero line and CHF is still above the zero line with both sizable heights, then you could say that this is a VERY good signal to go short in GBPCHF.
    • The key is to check whether a given pair's position and length is consistent across different timeframes. If a currency pair is consistent in more timeframes, the less risky the trade is.
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