Hi fellow traders!

I've been looking forward to posting an updated version of a currency strength chart I posted a while back. I use it to determine what to trade and in which direction.

These charts are an attempt to visualise the gain/loss in strength over time, of each currency, compared to 7 others. I have set this up to display 4 timeframes. 15, 60, 240 and 1440 so you can see what the markets are up to, at the glance of an eye.

: I see now the formulas are visible in the background. This wasn't the case before I posted it. That's really too bad. If your screen resolution is very high or when you expand your browser over 2 monitors, it looks fine. For who's interested though, I can explain how to make such chart yourself, so you don't have to look at the annoying black text in the background.

Here's a direct link to the charts. It seems to solve this problem!!! If you're a PRO user, it should display correctly. https://www.tradingview.com/e/EtXjrknx/

It's important to understand that the lines are all relative to each other. That means if one currency goes wild, it will distort your view of all the others. That's alright though, because we always compare two lines before we make a trade and as long as we're sure to understand that a currency that's sloping up isn't necessarily gaining strength, but that it's at least losing less strength than the currencies that are not as much sloping up, we will be kept out of bad trades. The concept of the lines being relative to each other might be easier to explain with a live example, so here it is:
The charts are showing how in the middle of october the JPY broke loose from the bunch to go south for the winter. It's move was so strong that instantly all other pairs started sloping up. This happened because the 0% line got shifted when the JPY made it's huge drop.
Now let's take this a step further. Obviously one could've shorted the JPY against all others for weeks, I did, but if you're not that kind of trader you could've also had a look at which other currency would be most likely to do the opposite of the JPY and what would you've found? There is a negative correlation between the CAD and the JPY, so... you bought some CADJPY! You see the negative correlation, right? Have a look at the chart on the lower left! Now a few weeks later, november is around the corner and you're feeling all happy about your huge CADJPY profit that is still going up and you see the CAD significantly break away from the rest too. What do you do? Well that's right! You find a weaker one to trade against the CAD, and so on and so on. You could've even catched a little counter trend trade on the EURUSD there in november. Right?

Now if you're still with me, try to picture some of the good and bad trades you took last week and look at the top two charts. What goes through your mind?

The upper two charts tell you a lot about what is currently happening. I was used to using the daily chart , until I saw how helpful it can be to keep an eye on the lower timeframes as well, even for non-intraday trading!!

I'd like to invite you to play around with the charts. Zoom in and out, change timeframes, scroll around, see if the charts agree with the trades you have been making or the trades you are currently in and have some fun making some predictions based on the charts! It's at least as easy as it looks!
Having these charts boosts my confidence big time! I hope it'll do the same for you!
Oh and I know the calculations can be done better, and I'm sure the charts can be used in many different ways, so I look forward to your thoughts guys!

I hope this makes sense!
Cheers!

Saf

Previous post on this subject:
Direct link to the charts: https://www.tradingview.com/e/EtXjrknx/