Currency Strength Meter Indicator MT4 | MT5

The Currency Strength Meter (CSM) is a technical analysis indicator designed to evaluate and display the real-time strength of each of the eight major currencies (USD, EUR, GBP, JPY, CHF, AUD, CAD, NZD).

Instead of analyzing just one forex pair, the CSM analyzes multiple pairs to show how each currency performs independently. The strength values for all eight currencies are displayed in the top-left corner of any chart where the indicator is applied, and they remain consistent across all charts regardless of the currency pair selected. These values update dynamically at the beginning of the next price candle, according to the selected timeframe.  

However, traders often used this indicator not to follow trends or measure volume, but to select the most promising currency pairs to trade by following these steps:

1. Identify the strongest and  weakest currencies:

- Look for the highest and lowest strength values.

2. Pair them together:

- Trade by buying the strongest currency and selling the weakest.

3. Confirm with Price Action or Technical Analysis:

- Use the other categories of technical analysis indicators (oscillator, patterns, etc.) before entering.

4. Exit strategy:

- Consider exiting when the strength values converge (the highest weakens and/or the lowest strengthens). 

Additionally, traders are advised to avoid trading pairs where both currencies are either strong or weak, as this may signal a consolidation phase in the market. For optimal results, it is best to use the Currency Strength Meter during high liquidity periods, such as the London and New York sessions. These periods can be easily identified using the Forex Sessions indicator, available for FREE on our platform, which helps traders make more accurate trading decisions.

1- In the GBPUSD chart example, using the MT5 version of the Currency Strength Meter, the strength values of all currencies are displayed at the top-left corner of the chart.

As presented, GBP has a strength value of 2.59, while USD stands at -3.32 in the H1 timeframe. This suggests that the USD is weakening while the GBP is strengthening, indicating a potential buy opportunity. Traders, however, should wait for a proper entry signal before opening a long position.

2- In the AUDNZD chart example, using the MT4 version of the Currency Strength Meter, the strength values of all currencies are displayed at the top-left corner of the H4 timeframe chart.

As shown, AUD has a strength value of 2.26, while NZD stands at -1.01. This indicates that the NZD is weakening while the AUD is strengthening, signaling a potential long trade. Traders, in this scenario, should wait for a proper entry signal before opening a buy position.

3- In the EURJPY chart example, using the MT5 version of the Currency Strength Meter, the strength values for all currencies are displayed in the top-left corner of the M5 timeframe chart.

In this case, the EUR and JPY have nearly equal strength values, at 0.07 and 0.12 respectively, indicating a consolidation phase and suggesting that there is no immediate trading opportunity for this pair. Traders should avoid entering the market and instead wait for further confirmation from the indicator after the next 5-minute candle. A trade setup could be considered if a clear divergence appears, with either the JPY strengthening and the EUR weakening, or vice versa.