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FXI - SingleTimeFrame



The FXI - SingleTimeFrame indicator displays the relative strength of each individual currency of a currency pair at the current moment. In the above, the FXI - SingleTimeFrame indicator is showing the Strength of the USD vs all other major currencies, the strength of the JPY against all other major currencies, and the difference in the strength of the USD vs. all of the majors and the JPY vs. all of the majors.

Below you will find a detailed description on how to read each element of the FXI - SingleTimeFrame indicator for MetaTrader 4.

Header Line



The Header Line displays the settings for the FXI - SingleTimeFrame Indicator. They are as follows:

  1. H1 = Timeframe -- The let most text indicates the timeframe that is being analyzed.  In the image above, the "H1" represents that 1 hour bars are being examined.
  2. 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.
  3. 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.
  4. 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.
  5. 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.


Body



The Body displays the data of the FXI - SingleTimeFrame indicator. The individual elements are as follows:

  1. Currency -- The text at the bottom defines the individual currencies that are being examined and the difference that is being calculated. In the image above, the "USD" shows that the United States Dollar is one of the two currencies being examined. The "JPY" stands for the Japanese Yen, and "DIFF" is for the difference in strength between the two
  2. Current Value -- The numbers just above the currency is the current value the CBST indicator has calculated. This number is either the sum or the average of the strength of the currency against all of the other majors. In other words, the "+2.98%" above the JPY shows that the JPY has, on average, gained 2.98% in value against every other major currency. The color that the value will be printed in can be set by you in the indicator properties.
  3. Histogram Bars -- The histogram bars show the values the CBST indicator has calculated for the current bar and the previous two bars. The right hand bar in the histogram is the graphical represendatation of the current value. So, the "-2.92%" above the DIFF, is shown in the right most negative bar in the image above.
  4. Scale -- The numbers on the left hand side of the body of the indicator show the scale of the histogram being displayed. The "+7.0%" and the "-7.0%" illustrate that these are the maximum or minimum values of the histogram.

Use of the FXI - SingleTimeFrame Indicator



So one might ask, how could I use the FXI - SingleTimeFrame indicator? A totally fair question!  We use, and suggest you use, the FXI - SingleTimeFrame as a filter for your other indicators and trading systems.  The above image is a good example of how one might use the FXI - SingleTimeFrame :

You can easily see that the USDJPY recently has increased in value.  The moving averages have crossed up and the USDJPY has increased from 90.15 to 90.85. But the qustion is whether this move is supported by how the USD is doing against the other majors compared to how the JPY is doing against the other majors.

The FXI - SingleTimeFrame shows that overall the USD is flat against other currencies, while the JPY is gaining significantly. This is represented by the 0.06% reading for the USD and teh +2.98% for the JPY. The -2.92% reading indicates that the USD should be losing against the JPY.  This is divergent to the trend of the USDJPY itself.

We would predict that the next bar or two will be down bars and this prediction would affect whether we stay in a trade, exit a trade, go short, or reverse a trade.
This is but one way a trader could use the FXI - SingleTimeFrame indicator. There are many others and we look forward to sharing them with you and in hearing how you find the indicator useful.

If you are interested in trying the FXI - SingleTimeFrame indicator, please go to the Downloads page to get the setup package.