Visual Currency Strength Meter
Visual Currency Strength Meter is a simple tool that allows you to quickly identify strength/weakness in several of the most traded currencies at once.
Why you should use Visual Currency Strength Meter?
Visual Currency Strength Meter can help us visualize the past based on historical price data across several currencies and identify a group of currencies that will potentially appreciate/depreciate in the future.
It is based on the idea that the current trend will continue, therefore, it can help you predict which currencies are best to buy and which are best to sell.
Therefore, before making a decision based either on the Visual Currency Strength Meter or some other trading strategy, it is best to take a look at what the overall trend has been for the past months.
To learn more about ways to combine Visual Currency Strength Meter with a strategy for trading, read our beginners or advanced guide.
How to use it?
The grey horizontal bar (or 100 level) represents the neutral position. Majors above this level are appreciating and vise versa currencies below are the depreciating ones.
The basic steps to find the best forex pair to trade are the following:
- First, identify the currency that has the biggest chance to appreciate.
- Second, identify the currency that has the biggest chance to depreciate.
- Third, match those two.
The tricky part is to actually identify which will appreciate and which will depreciate. For this, you can look at the chart and try to determine a trend based on the historical data presented.
Select the currencies that have a clear uptrend and match them against currencies that are in a clear downtrend in order to determine the best possible currency pair that you can trade.
This, however, should be used as a long-term trend indicator for the best results.
To discuss the currency strength meter further, please visit our Forum Thread
Additionally, further reading is always available in our blog/trading resources section or looked-up using the search feature.
Keep in mind that this information should also be used in addition to other tools and types of analysis such as:
Read further about How to Combine Different Types of Forex Analysis
Now you should be ready to start using the Central Bank Rates table and combine it with Forex Day Trading Strategies.