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The foreign exchange market (forex market) is where currencies are bought and sold. It is the world’s only real-time market for trading. Historically, institutional firms and large banks dominated the forex market, acting on behalf of their clients. Nevertheless, it has become more retail-oriented in recent years, and investors and traders with a range of holding sizes have begun to participate. Today however, we’ll talk about forex currency strength meters.
A unique feature of the world forex markets is the absence of physical trading venues. Rather than that, it is a network of links established via trading terminals and computer systems. Organizations, investment banks, commercial banks, and retail investors all participate in this market.
What are Forex Currency Strength Meters?
Essentially, Forex Currency Strength Meters offer a graphical representation of ongoing and active currencies in the market. So, you can see if the chosen currency is weak or strong. Such meters can act as filters for MT4, MT5, and Forex markets on the go. An excellent meter can show you if your chosen currency will go up or down in the pre-decided time-frame. Therefore, you can add a currency strength meter to your trading rules and enhance the accuracy of your investments.
How Do You Measure Forex Currency Strength?
Currency meters are used for measuring the Forex currency strength. It’s a quick approach for Forex traders to see if trading conditions affect their positions favorably or unfavorably. There are five main steps involved in measuring the forex currency strength. Such steps are:
- Identify the base currency
- Pair the base currency with all available Forex pair
- Assess the relative strength of each paired currency
- Calculate the median score
- Use the results to decide with forex currency pair to trade
The central concept behind the strength meter is to consider it a “filter” in decision-making. Also, keep in mind that a currency’s power is always determined by the periods you select. For example, EUR may be vital in today’s time frame, but it is one of the weakest monthly evaluations.
You may require other time frames depending on your Forex trading strategy. You need recent knowledge if you are an intraday trader. Monthly values are necessary if you are a long-term trader.
Traders can use currency strength meters in different ways, depending on their trading style. If they trade in the trend, they can get the most robust trend based on the strongest and weakest currency pair using the latest tools for traders. If you wish to change in a range, pick currencies with modest strength differences.
Best Forex Currency Strength Meter Options
There are different currency strength meters available in the market. Some currency strength meters are free, but some are paid. The main issue is precision. It’s remarkable how many calculators get the currency strength wrong. However, speed and reliability are also the main issues.
These meters are used daily by forex traders to make decisions. Having precise and dependable data is vital for traders. Currency strength inaccuracies can lead to costly trade errors. Inaccurate currency strength data can lead to lost trade chances.
After much trial and error, we discovered some real and dependable strength meters. The list of best forex currency strength meters is described below.
1. Live Strength Meter by Switch Markets
Other than keeping in sync with the latest forex news, you also need to rely on real-time indicators and strength meters. If you want an easy-to-use and simple tool, the Live Currency Strength Meter by Switch Markets is here for you. On the top, you can choose from various currencies per your requirements. You can quickly choose your preferred currencies, compare them in real-time, and make sense of the data.
Similarly, the information is color-coded. Therefore, you can make quick and rational decisions without having to comb through heaps of unintelligible data. The user interface is simple, straightforward, and ideal for novice and advanced users.
2. Accustrength by Tom Yeomans
When it comes to currency strength meters, Accustrength is pretty much the gold standard. Since its launch, Accustrength has been a high-quality currency strength meter that many expert forex traders have utilized.
Accustrength offers a specialized currency robust data server, which delivers real-time and historical currency strength data. It contrasts with many currency strength meter products, which rely on an MT4 trading terminal as their data input.
The benefits of having a centralized data feed include:
- There is no need to run an MT4 trading terminal at the same time.
- A dedicated data feed is more trustworthy and reliable than MT4 broker data feeds, particularly MT4 demo accounts, which are infamously problematic.
- Faster data updates and lower latency
Accustrength is famous as one of the best currency strength meters on the market. It’s a very sophisticated product. Its currency strength data is highly reliable. Because Accustrength has its data server, there is no need to obtain data through a trading platform.
3. Currency Quake Currency Strength Meter
Currency Quake currency strength meter evaluates currency strength once more using a basket of historical forex values for a total of eight currencies. This currency strength indicator refreshes every 5 minutes. When the markets are closed, the meter stops till they reopen.
It is critical to comprehend, especially for traders who trade the markets in a shorter time frame. It is vital to visually confirm what the currency strength meter is telling you about the strength of a currency.
4. Live Charts Currency Strength Maker
The live charts provide a quick visual overview of historical currency strength since 2004. Furthermore, the meter calculates the power of ten currencies. The meter collects readings from each forex pair during the last 24 hours and applies calculations to each. It then aggregates all of the linked teams to a single currency (for example, EUR/USD, GBP/USD, USD/JPY, EUR/GBP, AUD/USD, and so on) and calculates the current strength.
It is helpful as a fast introduction to which countries you might want to trade and which you should avoid. For example, if one currency is powerful and another suddenly weakens, you may discover a trading opportunity.
Such divergence between pairs is usually indicative of momentum. In contrast, when two currencies are weak, firm, or average in strength, they frequently move in a range or sideways fashion. You might want to avoid trading those pairings.
Conclusion
You might understand how the Forex market works. However, you need all the useful data within your grasp to truly understand how to invest profitably in the market. Therefore, you need a live currency strength meter to show you meaningful stats in real-time. This way, you can see how the ongoing factors will impact your monetary decisions, and if your investments will yield good results or not. We have listed the top currency strength meters above. You can choose per your personal and financial preferences. Good Luck!
