- 1 MetaTrader 4
- 1.1 Currency Strength Indicator – An Introduction
- 1.2 Currency Strength Indicator – Some Simple Scalping Examples
- 1.3 Currency Strength Indicator – Trend and Swing Trading Examples
- 1.4 Currency Strength Indicator – Joining the Trend Once It’s Started
- 1.5 Currency Strength Indicator in Multiple Timeframes
- 1.6 Currency Strength Indicator – Time to be Patient!
- 1.7 Currency Strength Indicator – Trade Management and Momentum
- 2 NinjaTrader 7
Currency Strength Indicator – An Introduction
In this video we introduce some of the basic concepts of the Quantum Trading currency strength indicator, how it works, how to use it, and how to identify low risk trading opportunities. The currency strength indicator identifies when a currency is strong or weak, oversold or overbought and works on all timeframes from minutes to months. It can be used in many different ways depending on a forex traders attitude to risk. The Quantum currency strength indicator isolates each individual currency from the 28 currency pairs, making it quick and easy to see trading opportunities as currencies move from strong to weak and back again, all the time.
Currency Strength Indicator – Some Simple Scalping Examples
In this video we explain how to use the currency strength indicator using a single timeframes, and looking for those regions where a currency is either overbought or oversold. These are the points at which a currency is likely to reverse the current trend. The currency strength indicator isolates each currency, and all we have to do a as forex traders is to match a strong currency with a weak currency, and the move to the chart for further analysis in that timeframe.
The video includes some simple examples from the 1 minute chart to the 1 hour chart. The currency strength indicator is your early warning radar, and guides you to those currencies and currency pairs to analyse those trading opportunities further.
Currency Strength Indicator – Trend and Swing Trading Examples
The currency strength indicator can be used in any time frame and for any trading strategy. whether you are a scalping trader, a swing trader or a trend trader. In this video we look at some examples using the currency strength indicator in longer term timeframes from the 4 hour chart to a weekly chart. The principles however are once again the same. Identify those currencies which are either oversold or overbought and then choose the currency pair for further analysis. The currency strength indicator is an early warning radar for currencies which are either strong or weak and from there it’s a simple step to spot those pairs which are ready to reverse the current trend.
Currency Strength Indicator – Joining the Trend Once It’s Started
In this video we look at another way to use the currency strength indicator which identifies once a trend has started. Here we look at the currencies as they cross on the middle of the indicator, sending a clear signal that a new trend is underway and offering an alternative entry point for trading. The extremes of the currency strength indicator signal the reversal points, and a new trend about to start. The crossover points signal that a trend is already underway.
Currency Strength Indicator in Multiple Timeframes
Using multiple timeframes to trade is a powerful approach but one which can also be applied when using the Quantum currency strength indicator. If a currency is being bought or sold across three timeframes then this reduces the risk on the trade, as the money flow is moving in now direction, so trading with the dominant trend is a low risk trade. In addition, this approach also reveals when currencies are approaching and then moving away from the extremes, once again highlighting trading opportunities.
This technique can be thought of as dropping a pebble in a pond.The change in sentiment is seen on the fast chart first, then the medium speed chart and finally onto the slow speed chart. This is an advanced way to use the currency strength indicator, to give a three dimensional aspect to the currency across multiple timeframes.
Currency Strength Indicator – Time to be Patient!
Whilst the currency strength indicator is great for telling you when to get into the market as a forex trader, it can else be used to tell you when to stay out and simple be patient. When the markets are in a congestions phase and lacking direction, then the currency strength indicator will signal this clearly and in all timeframes, and when it does, then it’s time to be patient and wait for the next trend to build on market momentum.
Currency Strength Indicator – Trade Management and Momentum
The currency strength indicator is a great tool for getting you into the market, but it’s also great at keeping you in and then getting you out at the right time. After all, if the currency strength indicator is good enough to get you in, then it’s also good enough to get you out and when a currency is reaching an overbought or oversold position, then this may be the signal to close.
In addition, the currency strength indicator also reveals the strength of the move – market momentum – with the steepness of the line showing this is a strong move higher or lower, with real momentum in the price action.
An introduction to the currency strength indicator for NinjaTrader
If there’s only one indicator you ever buy for trading forex – this has to be it.
Your success as a forex trader depends on being able to identify when a currency or currency pair is oversold or overbought. If it’s strong or weak, rising or falling and in addition the momentum behind every trend. It’s this concept which lies at the heart of forex trading. Without the Quantum Currency Strength indicator, it’s almost impossible. There are simply too many currencies and too many pairs to do this quickly and easily yourself and even more so when you consider the multitude of charts and timeframes available from seconds and ticks to minutes hours, days and weeks.
The currency strength indicator for NinjaTrader has been designed with one simple objective in mind. To give you a bird’s eye view of the eight major currencies and to show you in a simple, quick and easy way every aspect of currency behaviour of which the first, and perhaps most important, when a currency is either oversold or overbought. In other words, strong or weak.
To help you, the indicator defines these regions for you, with a simple horizontal line. One near the top at 80, and the other near the bottom at 20. When a currency reaches the upper grey line, then it is approaching an overbought state, and when a currency approaches the lower grey line, conversely it is approaching an oversold state.
It’s at these points that the current trend is likely to reverse, offering you potential low risk trading opportunities as a result. Currencies move constantly from one state to another throughout the trading session and in all timeframes and it’s when a currency has reached one of these regions, that a potential reversal in trend is then likely, and it’s simply a question of being patient and waiting for the move to develop on the chart
The currency strength indicator displays the eight currencies individually and you can think of these as the raw components of the forex market – the building blocks if you like, and once disassembled for you to see easily, then gives you endless combinations of trading opportunities from scalping to swing and trend trading in all the various currency pairs.