What is Currency Strength Meter (CSM) and how to take advantage of this amazing little tool? Once you start using it, you won’t take another trade without it! Here’s a brief description of CSM: a standalone program that calculates over 30+ currency pairs in real time and displays an at-a-glance view of the strengths and weaknesses of all major currencies, namely the USD, EUR, GBP, CHF, AUD, JPY, and NZD. The Strength readings vary from 0.0 to 9.0, with 0.0 being the weakest and 9.0 being the strongest. When you compare the strongest vs the weakest currencies, you will get a the most trending pair
It is useful as a quick guide to which currencies you might want to trade using hedging, and which might be worth staying away from hedging instead you can use scalping the pair and averaging the trade . For instance, if a certain currency is very strong, and another suddenly turns weaker, you may find a trading opportunity. Such deviation between pairs usually indicates momentum, a trending pair which is suitable with hedging strategy. Conversely, if two currencies are weak, strong or average strength, there is often a range or sideways movement happening. You might want to use averaging strategy with small take profit at this movement.
Pair Strength Analyzer (PSA) is an indicator that can be used as an adjunct to currency strength indicators, to confirm strength/weakness by using a very different algorithm.