In this post I will be reviewing the Currency Strength Meter for the popular and free to download MetaTrader 4 (MT4) trading platform that is currently one of the most widely used online forex trading platforms around the world. This is a handy tool that can be used to get a feel for the strength of each currency which can help to inspire possible trading signals.
In this Currency Strength Meter Review, I will be taking a closer look at this forex trading tool to see exactly what it is and how it works. Hopefully, this will help you to make a decision if it is something that you would like to implement as part of your day trading strategy.
What is the Currency Strength Meter?
The Currency Strength Meter is a graphical representation of the strength or weakness of currencies in the Forex market. Traders can use currency strength to predict currency movements when making forex trading decisions. Looking at which currency is under or overvalued is an excellent additional signal or filter in technical analysis.
The Currency Strength Meter as the name suggests, will display on your MT4 trading platform the strength of each currency pair in colour coded format thus making it super easy to interpret. Once you know the different currency strengths, you can have an edge over the market and can choose to trade the strongest currency pairs if you wish.
Currency pairs move up and down when one currency is stronger or weaker than the other so using the Currency Strength Meter to know these strengths and weaknesses over multiple time frames is of course highly beneficial and a great tool to have in your trading arsenal.
The chart tool is set up so you can see each major currency pair and how it compares to all other pair on each time frame. The green blocks indicate that that currency is very strong on those particular times frames than any other currency. On the contrary, the red blocks indicate that the pair is weaker than any other currency on that particular time frame. It is as simple as that!
How does the Currency Strength Meter work?
The Currency Strength Meter is simple to understand, easy to use and profitable when used correctly. By correctly I mean ensuring that you interpret the currency strength signals correctly and use additional technical, fundamental and price action analysis to confirm entry and exit signals. You simply attach it to your charts in the MT4 platform and it will show you the strength of currencies which you can compare and use to find trading opportunities.
You can use the Currency Strength Meter on any currency pair and time frame that you wish. I would personally trade the major EUR, USD & GBP pairs as I find that they tend to have the most liquidity as well as an ECN forex broker for lower trading costs and the best possible trading conditions. IC Markets are one of my top choices of forex broker because they have lots of liquidity which means you can get your trades executed at some of the best prices available at all times.
How to trade with the Currency Strength Meter?
There are many ways to use the Currency Strength Meter in your trading, and they all depend on your trading style. If you are trading in the trend direction, get the most robust trend based on the pair with the strongest and weakest currency. If you want to trade in a range, you can choose currencies where there is a slight difference in strength. The way recommended by the professionals is to use a forex strength meter as an additional confirmation.
The basic idea of the strength meter is to think of it as a “filter” in decisions. It allows us to determine, for example, whether the US dollar is strengthening or weakening, which is always essential to know. Another thing to note is that a particular currency’s strength is always determined by the timeframes you set for it. For example, EUR can be solid for today’s timeframe, but could be one of the weakest on the list in monthly analysis.
Of course, as with any forex system, I would make sure that I have good money management in place so that winner trades are greater than losing trades so I maintain a sensible risk to reward ratio. I find it best to cut losing trades short and let the winning trades run with a break even and trailing stop loss to lock in as much profit as possible. Some professional traders would look to take trades where there is a minimum risk to reward ratio of at least 1:3 to make sure that one losing trade does not wipe out a run of winners.
Currency Strength Meter Summary
In the first place, a currency strength indicator is a simple tool that is very easy to use. As a short-term indicator, it is invaluable. It has the ability to help traders avoid needless hedging and double exposure. Also, it can determine the risk level of the trades you have just entered.
The Currency Strength Meter is a very useful tool to add to other tools such as the forex market sentiment and other technical, fundamental and analysis based systems. Although the Currency Strength Meter indicator doesn’t provide 100% accurate signals, it’s useful when identifying a trade’s direction.
The most important point to understand is that currency strength indicators give you a small piece of information. You have to take that piece of information about the strength or weakness of a currency and see how it fits in the larger picture.
The more you know about the inner movements of the market, the greater your edge can be, provided you have the correct strong trading discipline and do not let fear, greed and other negative factors stop you.
The Currency Strength Meter has slick dashboards that look great and includes multiple bonuses, full support, instructions and a money back guarantee.
Currency Strength Meter
$147
Pros
- Any Forex Broker
- Multiple Currency Pairs
- Multiple Timeframes
- Currency Strength Tool
- Traders Dashboard
- Get Trading Signals
- Manual Forex Trading System
- Full Support
- Detailed Instructions
- Money Back Guarantee
Cons
- MetaTrader 4 Only
- Quite Complex For Beginners
- Requires Some User Initiative
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
