The FXCORRELATOR Indicator (and Trading strategies further below)
I developed this simple moving average based forex strengthmeter back in the early 2000's and have not changed one bit of it since.
Its my humble interpretation of some great open software work that was being generated by a few legendary MT4 programming pioneers at that time ...
Remember - back in the early 2000's the Trading and IT worlds were not like these modern times.....we were only just getting into using home based trading platforms and retail trading on small laptops and PC's !
Sure I have developed hundreds of variations and derivatives in the last 18 years - working with some great traders and programmers, but this is the daddy of them all ....and still packs a punch !
the MT4 metatrader platform model is freely offered below and i hope it helps you on your trading journey ....its been downloaded several thousand times now across many big forums .....and I am humbled by the many kind traders who have sent me messages of thanks and support for its abilities over the years
Simple Strategies using the FXCORRELATOR Indicator :-
Ok - I have written literally hundreds of strategies for using my indicator over the last 20 years or so.
However the primary use of this tool is to get traders onto :-
THE RIGHT CURRENCY PAIR(S)
AT THE RIGHT TIME
IN THE RIGHT PLACE
In other words the primary use of this indicator (and any FX strengthmeter) is to ensure traders are only focused on Currencies and related currency pairs with the highest probability of delivering winning trades.
Now there are many interpretations of this - just as there are infinite ways of determining what is a good trading signal or pattern - however in this article I will reduce the criteria to just seeking Pairs with strong trend signals for ease of discussion.
so heres my indicator on a pair that is demonstrating a strong trend .....
ok lets remove the other currencies just leaving the Green USD and the Red GBP.....
Better ? - ok if you read the guides published above and look at my videos on youtube you will know that the ZERO dotted line on the indicator chart is very important to my trading ......it tells me that any currency index ABOVE the zero is showing bull and strong for the Moving average being used (default 20ma here) and any index line BELOW the zero is showing bear and weak.
can you see how this immediately provides more information than just the dumb and humble yellow 20 MA line on the chart ?
not sure ?....see below and how we can identify the OPTIMUM and powerful situations when both currencies are showing Strength and Weakness at the same time ......
In this simple strategy we should only consider looking for trades when the 2 currencies are on OPPOSITE sides of the ZERO ......as any other time the currencies are on the same side (either both Bull or both Bear) and NOT displaying strong enough BIAS to consider trading
from this basic benchmark a trader can begin to introduce their more familiar signals / patterns and other indicators that they use to trade the market. However by this simple method they will now be able to remove at least 50-60% of the 28 Currency pairs available to trade in the G8 and focus on the BEST opportunities.
This simple and basic Rule is the foundation of literally Hundreds of FXCorrleator trading strategies I have used over the last 20 years ...it is the building block for many i still use , alongside more traditional chart based patterns and indicators combinations
try it in any trend following strategy and see if it helps you start focusing on the pairs that are trending ....rather than your 2-3 favourite pairs (we all have them) that you trade continuously and follow signals loyally.....
when you decide to trade a currency pair without consulting the Fxcorrelator there is only a 27/1 chance you are trading the best signal
.......do you really want to take that risk ?
More Strategies using the FXCORRELATOR Indicator :-
I have spent the last 20 years trading systems based on this indicator and its derivatives ......please visit the Links page on this website to see the many resources available and the Free indicators , advice and consulting i have provided.
I will be running courses again in the future so please register on this site (CV page has registration info) and i will be in touch when that happens ....there is no pressure and no hassle from me to join of participate.
People that know me will tell you I am a Successful independent Trader and Business consultant who choses to provide commercial FX training at times based on demand from traders that have profited from the multitude of free training material, indicators and articles I have published in the last 15 years.
I hope you enjoy the indicator and this website / Blog .....please do not hesitate to contact me if you have any questions and i look forward to perhaps talking one day ......
Best Regards and wishing you a successful trading career.....