Knowledge of the strength and weakness of each currency is vital for every forex trader. Our currency strength indicator measures strength of eight major currencies (USD, EUR, GBP, CHF, JPY, CAD, AUD, NZD) by using Relative Strength Index indicator, also known as RSI. PipTick Currency Strength Indicator show you in a simple and quick way, when a currency is oversold, overbought or in "normal area". In this way, you can simply identify, which currency is the strongest and which is the weakest.

The indicator is calculated from 28 currency pairs and works on every MT platform. PipTick CSI uses only 7 currency pairs for calculation of the rest of 21 pairs. For correct working of the indicator you need only these seven pairs in your MT platform: EURUSD, GBPUSD, AUDUSD, NZDUSD, USDJPY, USDCHF and USDCAD.

Note: If the indicator is used in Strategy Tester, data of all pairs have to be downloaded in History Center before (How-to). If it is added to the chart as usual, no downloads are needed.

Interpretation of the indicator

Because PipTick CSI is based on the RSI, its interpretation is very simple. There are three areas

• Oversold area (the value of CSI is 0 - 30)
• Normal zone area (the value of CSI is 30 - 70)
• Overbought area (the value of CSI is 70 - 100)

How to you use it?

There are two basic approaches how to trade currency strength and weakness:

• Buy strong currency and sell weak currency - Trend Following strategy. For example, if you see the EUR is strengthening and AUD is weakening, buy EURAUD currency pair. Do not trade if one of currencies is overbought/oversold.
• Sell strong currency and buy weak currency - Counter Trend strategy. For example, if USD is overbought (above the level of 70) and JPY is oversold (under the level of 30), sell USDJPY.

You can achieve great results if you use overbought/oversold concept of currency in conjunction with Price Action or Candlestick patterns. All you have to do is wait for overbought/oversold of one currency, followed by drawing candlestick pattern like hammer or shooting star. Of course, this is just one of thousands of possible ways of using of our currency strength indicator.

You can use this indicator for long-term, swing, intraday or even scalp trading.

It is possible to use PipTick CSI for manual backtest as well. All you have to do is set parameter "Bars_Ago = 0" in indicator settings and download historical data for seven currency pairs which our indicator needs to calculate.

Main features

• The indicator shows strength and weakness of eight major currencies
• Simple comparison of one currency against another
• Overbought and oversold area for entering or exiting the trades
• Works on every timeframe
• The indicator is non-repainting
• Ready for backtesting
• Customizable parameters
• Excellent results in conjunction with PA and Candlestick patterns
• Ideal tool for scalping
• Very fast calculation
• Indicator works with prefix and suffix of symbols as well
• Available for MT4 and MT5

Inputs

• Bars_Ago - Number of bars displayed by the indicator
• RSI_Period - Period for RSI calculation
• Weighted_Mode - Allows to choose between weighted or unweighted calculation
• Smoothed_Mode - Allows to choose between raw or smoothed curve
• Smoothed_Method - Allows to choose from for type of smoothing
• Smoothed_Period - Period of smoothing calculation
• Text_Size - Text size of labels
• Line_Thickness - Thickness of lines
• Weight_USD...NZD - USD...NZD weight coefficient
• Visibility_USD...NZD - USD...NZD visibility
• Color_USD...NZD - Color of USD...NZD curve and label

Outputs

• USD...NZD - Value of USD...NZD CSI

For more information, visit the PipTick Currency Strength Indicator.