Currency Strength
By LuxAlgoFeb 7, 2023
Currency Strength is an indicator on Vela, our next-generation charting platform, written in Pine Script®.
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The Currency Strength indicator scores five user-selected currencies against one another and plots how those scores evolve across a chosen period. It's LuxAlgo's build of the currency strength meter: each currency's close-to-open change is normalized to a percentage, averaged across the currency's four pairings in the basket into a composite score, and accumulated until the period resets, so "strength" means measured relative performance, nothing vaguer.
How to Trade the Currency Strength?
- Ranking read: currencies topping the meter are outperforming the basket over the window; those at the bottom are lagging, the raw material for choosing which pairs deserve attention.
- Trailing strength lines: the historical plot shows each currency's accumulated relative performance, resetting at period end so readings stay comparable across cycles.
- Scatter quadrants: each currency's current strength (vertical) is plotted against its change from the previous period's final reading (horizontal, scaled across the basket). Strong (green, upper right) is positive strength with a larger change; Improving (aqua, upper left) is positive strength with a smaller change; Weakening (yellow, lower right) is negative strength with a larger change; Weak (red, lower left) is negative strength with a smaller change.
- Meter resolution: raise it to expose finer differences between closely matched currencies.
The scatter view is the distinctive piece: by plotting current strength against the previous period's, it separates level from momentum: a currency that is strong-but-fading reads very differently from one that is weak-but-turning.
What the Currency Strength Shows
- The trailing relative strength of the five selected currencies over a user-defined timeframe period, or a scatter plot as an alternative display.
- A strength meter whose visibility, resolution, position, and size are configurable.
- A scatter graph whose horizontal width in bars is set by Scatter Graph Resolution; the vertical extent follows the strength values.
- Under the hood, each pairing's reading is the normalized close-to-open change, (close − open) / open × 100, composited per currency across the basket.
Frequently Asked Questions
Free to use
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- Up to 500 Custom Alerts, with webhook automation
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- More Quant usage to customize it, plus extra usage when you need it
- Futures data alongside crypto, stocks, forex and commodities
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