Market is “Flat” in both conditions (rightmost vertical line). Can we “predict”, based on USD (green) and GBP (red) direction – where the market is going?
Can you show me the result of the following [ GBP (red) – USD (green) ]. I bet it will look just like GBPUSD, hence it being a index based indicator and not strength. Also I don’t see anything other than what I see in the chart already. When both are flat, the currency is flat, only when one is increasing and the other is decreasing is it moving. Looks to me like a typical currency index indicator. Here is the same chart with the popular very simple CC indicator (attached if anybody wants to download it). Looks almost identical doesn’t it?
And if you take the difference [ GBP (red) – USD (green) ] you would end up with a line that is identical to GBPUSD. At the end, its not showing me anything useful or more because when GU is flat, guess what, thats when Red and Green is flat. When GU is going up, thats when Red is increasing and Green is decreasing. It’s exactly as if you were to trade based on the slope of the MA of GBPUSD. Going long when slope is up and short when slope is down. Is that really currency strength? I mean sure, if you call that currency strength thats fine, its up to you. To me that’s not currency strength, that’s an index.
Here I think is the only way to define currency strength.. when GBPUSD is ranging without a clear direction, currency strength should tell me which of the two is the strongest. Therefor telling us which direction to take the trade. When GBPUSD is trending higher, currency strength should tell me when GBP strength is ending and USD strength is picking up before it turns.
Anyways, I’m not here to have an endless debate on whether or not gg’s indicator is a currency strength or currency index indicator since I haven’t even seen the code nor do I know how it works. So there is no point in debating over it. My goal is to create a currency strength indicator and not another index indicator since I find them to be inferior and confusing compared to the pure price chart (and I’m sure some will disagree).
So how can we create an indicator that can tell me when the market is ranging which of the two is stronger and when its trending, when that trend is about to change? Is that even possible to make? haha
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