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Thank you for your replies, gg53!
Since this indicator has no specific “anchor” (either certain date/time or external fixed value) it will not sum up to “0” or “1” – because everything is floating and relates to one another – instead of relating to some “fixed” mutual value.
Great – got that! So the slope of each line should be more important than its current value, right?
As to the “market share” of each currency – you can ignore it and dismiss its relevance if you think that a small increase/decrease in the NZD have the same effect on the market as similiar increase/decrease in the all mighty $USD…
No, certainly not! But what are we doing here? Watching prices in the recent past and trying to find an edge for our trading while calculating where prices might move in the near future. How does ‘market share’ fit into any such algorithm? We can assess volume of each instrument traded, and market share will certainly be reflected in absolute volume, in some way. So, what’s the algorithmic connection to CS? On the other hand: let’s consider EURUSD moves up by 0.1 %, and so does EURNZD. Acknowledging the fact that both movements were done at different volumes / market shares, it’s still the same 0.1 % movement on both instruments, resulting in roughly the same win or loss potential.
Market share: you’re talking about percent change, but I think the algo is calculating pips change… G.
Below is the Fxcorrelator comparison: with & without market share. It looks “strange” may be because of using Percentage, not Pips ….
How to calculate pips change in relation to Market Share ….
thanks in advance.