Currency Strength Lines Indicator for MT4 and MT5

A currency strength indicator is a tool that helps you understand the absolute strength of a currency when you are trying to forecast the future trend. Below, you will find more information about Currency Strength Lines indicator for MetaTrader.

Currency Strength Lines indicator for MT4 and MT5 is a powerful tool that can evaluate the strength of a currency and generate trading signals in your MetaTrader platform.

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What is Currency Strength Lines?

To understand what a currency strength lines indicator for MetaTrader is, you should know that the value of a currency is always expressed in relation to another currency or commodity. We call it an exchange rate.

For example, see the EUR/USD currency pair. We express the value of EUR relatively to USD, 1.0638. This means that with 1 EUR you can buy 1.0638 USD.

But what if you want the absolute strength of a currency? The is what a Currency Strength Lines indicator is for.

A Currency Strength Indicator (or Currency Strength Meter) is a tool that tries to express the absolute strength of a currency, so that you can compare this strength with the strength of other currencies.

There is no exact rule to calculate this strength, but there are several ways that can help in the approximation.

Almost all methods involve some kind of analysis in all the pairs where a currency is present. For example, if we want to measure the strength of the EUR, we will have to analyze how the EUR is faring in all its pairs: EUR/USD, EUR/GBP, EUR/JPY, EUR/AUD, EUR/NZD, EUR/CAD, EUR/CHF.

This will allow us to calculate the strength without depending solely on one other currency. In other words, it will express the strength of a currency across the board.

This concept can be quite confusing at first, but with some examples, it will get easier.

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Why use Currency Strength Lines indicator?

• Find trading opportunities — get entry and exit signals based on the strength of currencies.
• Complex algorithm — the algorithm will detect the strength by analyzing the price in several pairs.
• Get notified — receive notifications when an entry or exit signal is generated.
• Free — no need to risk by paying money to indicator sellers.
• MT4 + MT5 — two versions available for MetaTrader 4 and MetaTrader 5.

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Features

The following are the features of our Currency Strength meter for MetaTrader:

• Automated complex algorithm
• Detection of strength based on multiple pairs
• Sensitivity adjustment
• Generation of entry and exit signals
• Alerts inside platform, by email or via mobile notifications
• Enable or disable currencies as you prefer
• Display of different timeframes
• Free and open-source
• Works in MT4 and in MT5

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Requirements and support

Before you start using the Currency Strength Lines indicator, you need to understand its requirements and capabilities:

• MetaTrader 4 — this indicator works in MetaTrader 4.
• MetaTrader 5 — this indicator works in MetaTrader 5.
• Free download — get .mq4, .mq5, .mqh files to control the indicator as you like.
• Multiple instruments — you can use this indicator with eight major currencies: USD, EUR, GBP, CHF, JPY, CAD, AUD, and NZD.

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How to read Currency Strength Lines indicator?

Interpreting a Currency Strength Lines indicator for MetaTrader is not difficult. This Currency Strength meter shows the strength of a currency with a line, and there are some simple rules to read it.

There are several ways to calculate the strength, however, the main rules are:

• A line going upwards means that the currency is gaining strength.
• A line pointing downwards means that the currency is becoming weak.
• Flat lines, or almost flat, represent currencies that are maintaining their current strength.
• A line above another one means that one currency is stronger than the other one.
• A line above zero is likely to have a bullish trend against currencies below zero and vice versa.

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How to trade Currency Strength Lines?

Considering the basic rules explained above, ideally you always want to trade a strong currency (or a strengthening one) against a weak currency (or a weakening one).

The Currency Strength Lines indicator is versatile and, depending on your trading style, you can use it for both long-term trading and scalping.

It is best to use Currency Strength Lines with some confirmation signals when trading.

Generally, you might want to trade:

• Diverging lines, where one currency is gaining strength and the other one is losing strength.
• Currencies on opposite sides — one with its line significantly above zero and one — significantly below.
• BUY the STRONG and SELL the WEAK.

And here are some examples for better understanding of those rules:

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Advantages

As you can see in the examples, knowing the strength of individual currencies can be very useful. In particular, the advantages of the Currency Strength Lines indicator for MetaTrader are:

• It shows the strength of a currency across the board, confirming or denying the price trend in a pair.
• Allows you to spot which currencies are strong and which are weak, so you can choose what pair to trade.
• Helps you understand if a trend is still strong or is exhausting.
• Helps you spot possible countertrends.
• Allows you to choose a method for currency strength meter calculation based on your experience as a trader (rate of change, smoothed ROC, relative strength index, smoothed RSI, stochastic main, stochastic signal).

Long story short, the indicator can be a helpful instrument for your trading, and if you employ technical analysis in your trading, you want it in your tool case.

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