Currency strength meter development has occupied us at Pipnotic for a very long time. Since 2010 our primary focus has been supply and demand, but our study of currency strength resulted in the development of some currency strength utilities that we used for the purpose of improving our supply and demand software. Due to the popularity and interest in our research within the field of currency strength, we decided to release the first version of our Pipnotic currency strength indicator in late 2012. While the Pipnotic currency strength indicator is extensively used by the majority of our members, currency strength indicators and their use in general, still continue to mystify many. In this short article I will present a new variant of the Pipnotic currency strength indicator that simplifies the use of currency strength.
Currency strength indicators and their use confuse many, as they tend to be complex especially when it comes to implementing them.
Coloured lines lines moving up, down and sideways, what does all of this mean and how can we use it to make better trading decisions?
This is a good question and if you ask those who have managed to make sense of currency strength to the degree that it can be used to better decision making, they will typically tell you that you simply need to spend a sufficient amount of time with currency strength in order to be able to grasp it. Currency strength is very powerful but it can be a challenge to use, if you don’t have enough chart-time or experience with it.
Currency strength, when done correctly, can be used for many things. As an example, it can be used to test the validity of a trade entry for two paired currencies. While this is not a trvial task for obvious reasons, it can be used to test varying entry criteria for currencies with varying strengths, as we have done via our algorithmic trading project, which uses currency strength exclusively for making trading decisions. The results are presented below, in chronological order:
I haven’t seen many algorithmic trading systems that focus exclusively on currency strength, but with limited resources we managed to create one that is able to harness the power of currency strength in order to make high-probability trading decisions. If a more discretionary approach is what you’re looking for, then currency strength can also be applied here to better the decision making process. That said, if you don’t know how to use the information you’re presented with, then having it will likely not help much.
In this short video I will show you the very first version of the Pipnotic currency strength meter that we started using for research purposes already back in 2011. This version of the currency strength meter was used for testing the strength of areas of supply and demand – and if you’re a Pipnotic supply and demand user, the SupplyAndDemandSignificance setting was created as a result of our currency strength research. In the following video I will introduce the new and much improved version of the first ever currency strength meter at Pipnotic. It was written a long time ago and has recently received some major updates and improvements, and now uses the same engine as the Pipnotic Currency Strength Utility GFX meter. This version has never before been released and is now entering as one of Pipnotic´s premium indicators for members. This version of the meter shows a much broader range of strength information from multiple time-frames than the GFX version, as the data is presented in text format and not graphically, enabling us to add a wider spectrum of information to the chart.
In the video above, I think the power of viewing very clear strength information is obvious, especially when you’re receiving the same information across multiple time-frames, as was the case the the provided examples.
If you have any questions regarding currency strength, supply and demand or any other Pipnotic software, please feel free to contact us via the contact form.