Currency Slope Strength Indicator

The Currency Slope Strength indicator is a technique for measuring the relative strength of currencies. It’s no secret that different currency combinations exhibit a variety of behaviors. Some pairs’ movement speed is growing, while others move smoothly without causing major trends. The Currency Slope Strength indicator allows a trader to evaluate which currency pair is the most active at the moment in comparison to the others.

What is the Currency Slope Strength Indicator?

The Currency Slope Strength indicator for MetaTrader is a unique trading tool that evaluates and compares currency strength. It includes lines that depict the growth and fall in the value of the selected currencies. The indicator employs algorithms that are sensitive to fluctuations in currency prices. The algorithms use a currency’s slope angle to determine its strength. When the negative slope angle is negative, the currency is weak, and when the positive slope angle is positive, the currency is strong.

Setting up the Currency Slope Strength Indicator
Setting up the Currency Slope Strength Indicator

Currency Slope Strength Strategy

This strategy can be used to identify the strengths of some major currencies in order for the traders to plan their trades accordingly. When two lines cross in the indicator window, it indicates a shift in trend direction. When one of the lines moves into and stays within the horizontal lines while the other line moves out, a potential new trend is presented. When two lines break out of the horizontal bars in opposite directions, it suggests a continuous trend.

Buy Signal

This could be your checklist for a buy trade:

  • When the indicator informs you on the strengths of two currencies that suggest a bullish trend for the pair.

Once this event occurs:

  • You could open a buy position after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when the strengths of the currencies no longer suggest a bullish trend.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Currency Slope Strength Indicator Buy Setup
Currency Slope Strength Indicator Buy Setup

Sell Signal

This could be your checklist for a sell trade:

  • When the indicator informs you on the strengths of two currencies that suggest a bearish trend for the pair.

Once this event occurs:

  • You could open a sell position after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when the strengths of the currencies no longer suggest a bearish trend.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Currency Slope Strength Indicator Sell Setup
Currency Slope Strength Indicator Sell Setup

Currency Slope Strength Pros & Cons

Pros

  • The Currency Slope Strength Indicator can inform traders on the strength of currencies in order for them to know which pairs would probably be more beneficial for them to trade per time.
  • This indicator may be advantageous for traders who combine fundamental analysis with technical analysis for their trade decisions.

Cons

  • The many lines of the Currency Slope Strength Indicator being entangled can be confusing.
  • This indicator may not be suitable for scalpers on smaller timeframes. The reason for this is that high-impact news tends to produce transitory hyper-volatility over shorter timeframes. And this hypersensitivity may have an impact on the indicator’s output computation.

Conclusion

The Currency Slope Strength Indicator for MT4 is essentially a trading tool that allows you to keep track of the strengths and weaknesses of various currency pairs. The indicator is suitable for beginning, intermediate, and advanced forex traders. Traders who make use of the Currency Slope Strength Indicator ought to know how to do technical analysis which is necessary to combine with this indicator before picking trades.