The currency power meter is an indicator that measures the individual strengths of currencies. With this knowledge, a trader can leverage the weakness and strengths of currencies to choose pairs that have the potential to be lucrative. You may also call it a currency strength indicator.
Many factors affect the strength of currencies. Some include interest rates, economies and news. With the currency strength meter indicator, however, a trader can see the strengths of these indicators without having to do any extra analysis or computing.
This strength determining indicator uses histograms to portray the power of each currency. Every currency has a wide and a narrow histogram in front of it. The wide histogram depicts the currency strength on the daily chart while the narrow histogram depicts the currency strength on any other time frame you are on.
Currency Power Meter Indicator Installation
1. Unzip the file you’ve downloaded.
2. Find the file that is called “currency-power-meter-indicator.ex4” and copy it.
3. Open your MT4.
4. Go to “File – Open Data Folder – MQL4”.
5. Paste the file into the “Indicators” folder in MQL4.
6. Restart your MT4.
After the installation, your MT4 trading chart will look like this:
How to trade with the Currency Power Meter Indicator
Using the currency strength indicator in real trading is simple. Load the indicator and compare the strengths of currencies. Pick a strong and a weak one. Then open the currency pair chart to look for trade entries using other forex analysis tools, such as other indicators or trading systems.
For instance, the USD has a strength of 7.1 on the daily time frame, and the JPY has 2.4. So you are looking to trade the USD/JPY currency pair. Because the USD has higher strength and the JPY has a low strength, you look for buy signal on the currency pair.
So, you go to the USD/JPY chart, do your analysis or use any forex signals indicator that you rely on. For example, I chose to wait for the next BUY signal from the Forex Aurum indicator:
Doing any of these is a misuse of the indicator:
- The currency strength indicator is not an entry or exit indicator. When you see that a currency is strong at the moment, you don’t just pair it up with a weak currency and make trades without proper analysis or a trustworthy indicator.
- If you are a scalper, or you trade the lower time frames, do not rely heavily on this indicator. The reason is that high-impact news is more likely to cause temporary hyper-volatility on the lower timeframes. And this hypersensitivity could affect the output calculation of the indicator.
My Conclusion on the Currency Power Meter Indicator
The currency power meter indicator is totally worth having in your trading arsenal. It is very useful for both beginner and expert forex traders because it has a simple interface, and it is easy to use. Also, day traders and swing traders would find the indicator helpful.
P.S.S. Check out software by Altra Forex Group here