Hey hey, what's up my friend, so welcome back to today's training right. So here's the thing as a Forex trader, one of the most pressing problems that you face is that there is just way so many different currency out there different currencies. For example. Let's say you want to buy the Euro but rayner: that's the euro dollar, the Euro, only the Euro, New Zealand, the Euro yen, the Euro, Swiss franc Mayu, which Europe air strike treatment and I get it right, there's just so many currency pairs out there and you Might be bullish on the Euro, but there's so many flavor to choose from I wish euro flavoured you want to choose the Euro Pound a euro yen and euro whatsoever.

So this is where a currency strength meter comes into play, makes your life easier to help you nail down right the right currency pairs to trade, depending on what you want to do, to write a train or to capture a swing and we'll get to that later. Okay, so in today's video right, here's what you learn right number, one, a mistake: almost all traders make when using the currency strengths and why you must avoid it. So this is something that many traders they are not aware of, and I want to share with you what this is right once you realize this right, you'll, never, you know, look at currency strong meter, the same way again number two: how to use a currency strain Meter to find high probability trading setups, whether you want to write a train or whether you wan na capture a swing right. You can do it right with a currency strength to help you filter down the right currency, pairs to trade and I'll.

Show you how to do it as well and finally right how to build your own currency strain meter without knowing a single line of code and without spending a single cent. Ah, how do you do that? Alright? So all this and raw in today's training right, you ready. Then let's get started so first thing: first, what is a currency strike me tur right, so this is basically a tool, a tool or an indicator. Whatever you wan na call it.

That tells you right, which are the strongest or weakest currencies out there right, according to the timeframe, your trading, of course - and I was explained more later, but basically it helps you identify the strong currency and the weak currencies in the market, and this is important right When you use a currency strong meter, I know that there's many Patti software tools out there and many of you are probably might even spend money on this currency stream. It's provided by someone else, but here's the thing right. You never want to use a currency strength if you don't know how it works. If you do not understand the formula behind it, if you do not understand the logic behind it, then you must never use the currency strike me tur, because here's the thing right, for example, let's say you're a day trader you trade off the five minutes timeframe and You purchase a currency, strong meter and since you do not know the logic or the formula behind it, the person who developed the currency stream, it might be meant for the higher time frame like a daily or weekly timeframe.

So you can see that there is this incongruence over here, a short-term trader using a longer term currency strong meter doesn't quite make sense. So this is why it's important to understand the logic, the formula behind every single currency, strain meter and don't worry I'll, show you how to create your own one, so you never have to rely on a third-party source ever again. Okay, so this is important. It doesn't matter whether you're using currency, streamit, ER or some random indicator.

You must understand how it works, the logic behind it. First thing: first, how do you create your own currency strength? So this is the fun part right, so you can do it in this simple steps. Number one! You want to create a list of major currency pairs. Okay, I assume you know what they are.

If you do not know I'll share with you, some of the list of major currency pairs, then you'll calculate the percentage change in price over the last 15 weeks. So why 15 weeks, all right? That's a good question. So, according to numerous academic research right momentum in the market are tends to persist, are based on a look-back period anyway, anywhere between the last three to 12 months. So, in other words right if a market has been moving higher over the last three months, it tends to continue moving higher over time all right.

So that is a look-back period, the three month period so anywhere between three months to twelve months right. That is a fair look-back period to reference to so 15 weeks. Right is about three months period, right that we are looking as a look-back period, meaning how much did a price change over the last three months and I'm a tree you'll rank them right from the strongest currency to the weakest one, and I'm for ideally, you wan Na do it on the weekends, where the markets are closed. The numbers are static, mini won't change, as the maquis know it's open, so I really do it on the weekends and buy mine.

I usually trade off. The four were in the daily timeframe. So the 15 weeks right ROC right the percentage change in price over the last 15. It suits very well for me.

So if you trade anywhere between the 400 and daily timeframe, I would say right the percentage change over the last 15 weeks right, it's a it's! A nice sweet spot. So how do you do it right so, first and foremost - and let's do this - get an Excel spreadsheet right! You know it's free can go to Google and get it right and what you do is to lease down all the major currency pairs. I just leased down the most basic one: the dollar, the USD euro dollar, pound, dollar, Aussie, dollar, New Zealand, dollar, Canadian dollar, yen, dollar and Swiss franc against the dollar - and one thing that you might have realized is that the buyer is dollar. Canadian Berra is a dollar yen, but because we want to make it right base, I mean the the second currency pair s dollar.

I just pretty much. You know use this in verse, one as well in Dori. If you use trading view, you can get those symbols as well, so let's see how to do it. Okay, so let me just remove this first.

So first thing: first right USD since USD is the currency that we are comparing against. It will always be zero. Okay. Next in euro dollar, what is the percentage change in price of euro dollar over the last fifteen weeks? And again, it's very simple: if you are using trading view, it's a free free chatting platform just type in here: euro dollar and I'll just click the first one and what you want to do is just go down to a weekly timeframe, which we are a go To indicators and look for our Aussie rate of change, it stands for rate of change once you've inserted it right, make sure your no weekly timeframe.

You just go to your settings and change it to over the last 15 weeks. Press, ok and what's going to happen, is that the ROC indicator indicator will give you a value. So in this case the value is negative. Two point: one: seven: how do I know that? Because because it's say so over here, okay, so negative, two point: one: seven, you wan na take that value and put it into your Excel spreadsheet.

Negative. Two point, one: seven simple, not too difficult right! So you do this for the other currency pairs as well. Let me do one more first or let's do the pound dollar. So again you go here.

Look for pound dollar click, the first one I mean, whichever one you prefer, then you look at the ROC value. For now, the pound dollar is negative. Four point: six: six: how do I know that? Because it says over here, sir okay, so Nega? Five. Four point: six: six! So I'm gon na put it over here negative four point: six six! So I'm not gon na do all right B.

I mean because it's all quite self-explanatory. So I've done this all ahead of time and you can see over here. I've done the least right, so you can see that right now, I've done all the different major currency pairs, okay and the rate of change over the last fifteen weeks. So now the next step to do is this okay, so we recall, you run the ring name from the strongest to the weakest.

So it's very simple: now we are back here as yourself at this point in time, right which currency pair has the largest value. So if you look at this, the largest value seems to be the Swiss franc against the dollar. Oh yeah, just one thing: let me backtrack one thing right so again, as I mentioned right, you can actually just search for you know things like Swiss franc. It's a dollar right, it will appear over here as well.

You look for, let's say the yen against the dollar. It will be there. So just click on this and then look at the arrest on. I mean the respective ROC and you know fill it up accordingly.

So, anyway, to back to where I was all right, so which one is the strongest right now as yourself and from the looks of things, the Swiss franc against the dollar, that seems to be a strongest currency pair right now. So Swiss franc is the strongest output in Swiss franc here, first, which number now is the second strongest. If you look at this, 0.9 is the strongest, and that is the yen, which is the third strongest. So from the looks of things I think dollar is the third strongest, because it's zero everything else after that is all negative something.

Okay, so dollar is the third strongest, which is the fourth strongest from the looks of things it seems to be euro, the free form. It's possibly the British Pound, followed by Canadian or Z and New Zealand there. We have it right, ranking from the strongest all the way down to the weakest. So New Zeeland, you can see over here yeah.

It has negative nine point, one eight. So this is the weakest one, the smallest numbers, because it has the largest negative value over here. Okay, negative, nine point, one eight! So this how you ran from the strongest all the way down to the weakest simple. So now we have our currency strength.

Meter. You know pretty much developed right. We now know over the last 15 weeks, which are the strongest currencies, is pretty much the Swiss franc, the yen and the dollar, and the weaker ones are the Aussie in the New Zealand dollar. So now moving on.

Okay, I mean do it on weekends. Okay, so I mean you know that already moving on, how do you use this information that you've just created? So you can do a couple of things number one. You can identify the strong trending markets and use it. You know to write trends because the markets right are in a really strong trending mode or, alternatively, you can identify weak trends or ranging markets right that allows you to capture a swing.

So here's alright. First and foremost, how do you identify strong trends? All you need to do is to pair the top two strongest against the bottom. Two weekers you can, you know, go with any permutation that you want. So in this case we look at this again.

You can see that right now, Ozzy seems to be one of the weaker ones: okay and a dollar pretty strong dollar, yen or three strength. They are pretty strong. So let's say we go with Aussie against the yen. How about that? Okay? So I'm going to my chance, we look at the Aussie against that.

Yet click on this, let's see how this one is. So if you look at all the against the yen, you can see that right now this market is in a downtrend, and that shouldn't be a surprise to you, because you saw that earlier. Aussie right was one of the weaker currencies out there and yeah it's one of the stronger ones. So, from the looks of things you can see that this market this market right.

Let me just remove this ROC. For now, this market is in a downtrend, so my top process now is that a creep? I want to look for selling opportunities right, because this this market and stuff right now isn't a nice downtrend. I can look for selling opportunity, so I don't go into no trading setup and stuff like that, because that's outside of today's training, but briefly what I will say is this rise that I will look for the price to come into this area of value. Okay, let me just change this to let's say let color okay, so right might be just Zuma.

You can see that the price has retested this level once twice thrice and right. Now then we broke here here could become a previous support which could, I guess, resistance. Okay, so my top process now be something like this okay, I know that, according to the currency Strangler, this market is impairing a weak currency against a strong currency, and this is the area of value where previous support could become resistant, so one possible setup. I could look at this for the price to show some form of price rejection in this area, so the price comes up, comes up, comes up and then gets reject, reject that strongly like this and closing near the lows.

So this is what I call a bearish price rejection and I can look for to sell right this market right in anticipation of lower price to come. So there are a few factors here going for our number one: the currency streaming, that we are paying the strong. Let's call it s.a.w right, s'alright strong against the weak number two. Clearly, this market is going to be in a downtrend, because we are pairing, a strong against the weak number three.

We are looking for the price to come to an area of value and number four. We look for a valid entry trigger. Let's call it et right before we take any short position. Does it make sense? So let's do one more example right, if we pair again, let's say New Zealand, okay, so one of the weakest one out there against the yen.

Let's see how that looks like so, you look at New Zealand against the yen, okay, so again, similar story. Let me just remove this line this market right now. You can see that it's in the downtrend, I'm gon na, adopt the same principle. Right identify my area of value.

Okay, just don't see how that level is being respected by the markets; okay, so somewhere here, okay, so you can see that tested once twice price break down here could be previous support. That could become resistance. Okay, so again same thing right: we could look for a possible price rejection at this area of value before taking a short trade right. If the price comes up comes out, gets reject that strongly.

There could be a valid trading setup to look for another wave right towards the downside, and since you know that you are pairing with a weak currency against a relatively strong one, you can you know drill your stop-loss right. Do you know see how much of the meat of the move you can capture right, maybe can use a moving average. You can use a ATR indicator to drill your stop-loss okay. So that's it now that you have understand right how this works.

Let's move back to the slice, how do you identify with friends or range okay so that you can capture a swing well, this time what you want to do is to pair currencies right of similar strength or weakness, so if currency pairs that they are ranked pretty Close to one another right, you expect that those markets to be you know either in a weak trend or range market. So let's see an example. So if you look over here Swiss franc against the yen, pretty close right, so we pair them together. Here's what you'll get Swiss franc against the yen so tell you time frame just remove this line.

Zoom a little bit. You can see that this market generally I'll, say it's a range right. A weak trend towards a range. So again same concept applies right.

This is the area of value here here. So if you're, not trade, this right I'll say this is a good currency pair. You know just look to capture one swing in the markets, so I just pull down Louis llama here. So a couple of ways: we can trade this right, so this market seems to be in a range.

You can look to buy low and sell high. So if the price comes up higher higher - and here this, we can look for potential selling opportunities at this area of resistance may be a false brick set up when the price breaks above the hinds then gets may now rejected. You know closing back within the range. That's one possibility another way we could look to buy a surprise.

Hit back down into this area of support then gets you know smack up closing back above the ridge. There could be a potential buying opportunity. Okay, can you see how this works? So, let's look at one more example: shall we so again, this time around? Let's say we pair the pound with the Aussie, pretty close one another right, so you you won't really expect a strong trending market right so pound against the Aussie over here. You can see that it's an uptrend right, but not exactly the strongest of uptrend.

So for this case, where is the area of value? Okay now identify this as possible. This level previous resistance that could become support, support, and this would be a potential area to look for buying opportunity. So can you see how this currency strain meter works? Alright, when you pair the strong and the weak right chances are you'll get nice trending market. If you pair currency pairs, which are of similar strength or weakness, you will probably get a weak trend or arrange market.

So let me share with you a few bonus tips right before we end of today's video, the more never use a currency strain meter to time in trees. This pool is not meant to tell you when to buy or when to sell. It's only help. It's only meant to help you filter out potential trading opportunities, all right and here's.

Why I say that if you look back at a chance right, aussie-dollar at one point in time, we can imagine any currency strain meter right which it will show that the Aussie against the dollar it's a it's. A very obvious. Very weakened dollar is very strong and if you were to blindly just sell based on the currency strength, all right, you will probably get killed on a pullback okay. So this is why I say that you know never use this to time.

Your entry just to serve as a filter to know which are the best trending currency pairs right now in which currency pairs are. I know you know we trend or range, so that's the first tip to share with you. I never use it to time your entries because you can be entering right when the market is extremely overbought oversold and that's where the pullback is about to come number two. You can tweak the currency strain meter to your needs.

So, as I explained earlier, I use the 15 weeks roc, which takes into consideration over the last three months of you know: price change. If you are a short term trader, you can use maybe a five weeks roc as possible as well or if you're a longer-term trader, you can go up to with the 30 weeks roc. So the concept here is what matters. There is no such thing as the best look-back period.

There's no such thing as the best settings for l4, your currency streeter, it doesn't exist. So you have to know what you're trying to achieve you have to know. You know whether you're a long term or short term, immediate um trading style trade, a trader right, then you can't wit your currency strengthener to your needs. So for me right, as I've mentioned right, I trade anywhere between the 4-hour and the daily timeframe.

So the 15 weeks Roc suits me. Well, if you are trading off the weekly timeframe, then maybe you can look at the 30 week Roc. Finally, right this currency strain meter, the concept, okay, we're not talking about specific settings parameters or whatever I'm talking about the concept. The big picture concept right of identifying strong markets and weak markets right.

The concept can be applied to commodities indices whatsoever, for example common odd commodities. You can do it with no go silver, platinum, palladium and, if I wish, are the strongest metals at a certain point. In time and look to buy the stronger ones, okay - and for in this right, you can, you know, do it across the stock markets, maybe the S & P 500 that Dow Nasdaq, the China a 50, the STI, the Philippine markets. You can do that as well.

Right, the key thing is that those markets they have to be in the same sector, does it make sense. So when I do this across the forex market, I compare it all against the USD as their base currency, because that's a kind of like they're all within the same sector, right they all correlated. So when you do this to commodities, you want to make sure that you're doing across commodities in the same sector like metals, gold, silver, copper whatsoever when you do it in the stock markets. Alright in this right, you don't make sure that you're, comparing you know against, maybe like SMP with the doubt and then state you don't compare SMP with oil, because they're not in the same sector, get what I mean.

Okay. So with that said right, if you, if you're still watching this video and you're enjoying it right, hit the thumbs up button, if you think this is a man doesn't make sense, then subscribe to the channel. This way, I can, you know, share with you more good stuff right to convince you otherwise. So, finally, alright, let's do a quick recap right number one, a currency strain meter helps you identify the strongest and weakest currencies out there right.

So this way right, you can, you know, find out which are the best trending markets and which are the ones in range or WIC trend and usually most currency. Strength. Meter is based on a percentage change in price over a given period. Some might use more complex formula, some use simple formula like the one and just shared, but generally that's the concept.

The idea behind most currency string me tur out there, and then we talk about how you can use it to identify different types of you know, market structure right and you can treat them accordingly, whether you want to ride the train or just capture a sweet. So with that said right, I hope you know you got value out of this training, video and if you want to learn more about the work that I do, my trading methodologies and stuff like that, then go down to my website. Okay, the links over here trading with Rainer comm scroll down a little bit right, just scroll down a little bit, and you can see this guy over here D ultimate guide to price action trading right. So just click.

This orange button and I'll send it to your email address for free all right. This guy will share with you how to better time your entries and exits. We talk more about support resistance, candlestick patterns and much much more so go. Do it right now, click this orange button and I'll send it to your email for free.

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