The Header Line displays the settings for the FXI - MultiBar indicator. They are as follows:
- H1 = Timeframe -- The left most text indicates the timeframe that is being analyzed. In the image above, the "H1" represents that 1 hour bars are being examined.
- PER(14) = Periods -- The next element shows how many periods back are being examined. The "PER(14)" indicates that 14 periods back are being examined to judge the strength of each individual currency of a pair.
- EMA(3) = Smoothing -- The third item displays the type and number of periods for the smoothing of the analysis. We calculate the strength of each individual currency of a pair and then smooth the results by the number of periods and with an averaging methodogy described by this item. The "EMA(3)" shows that the indicator is using an Exponential Moving Average over 3 periods to smooth the results.
- PRC(T) = Price Type -- This element describes the type of price that is being used for the calculation. The "PRC(T)" describes a Typical price which is the (H+l+C)/3.
- AVG = Calc Type -- The last item describes whether we are averaging of summing the results. The "AVG" shows that we are averaging the strenthg of each currency in the pair against all other individual currencies as opposed to summing the strength of each currency in the pair against all other currencies.
The body displays the data of the FXI - MultiBar Divergence indicator. The individual elements are as follows:
If you are interested in trying the FXI - MultiBar Divergence indicator, please go to the Downloads page to get the setup package.
- Red line -- The red line is the momentum of the currency pair. In this case it is the value for price movement of the EURUSD.
- Green line -- The green line is the internal momentum of the EUR vs. the USD. It is the difference in the internal strength of the EUR less the internal strength of the USD. Each currency's strength is measured against every other currency and then that difference is calculated, the result is graphed as the green line.
- Histogram Bars -- The histogram bars show the difference in strength between the red line and the green line. It is the divergence between the strength of the currency pair and the implied strength of the currency pair as measured by the difference in the strengths of the component currencies.