Currency Relative Strength
by Trader Rich
I’ve finished a new website feature tonight that displays currency strength graphs based on parameters you choose. You can specify how you want relative strength to be calculated, either the simple moving average, exponential moving average, or TRIX with a period between 2 and 14 days.
The whole idea was inspired by a trading model at http://www.mkl.sp.ru/charts.html. He no longer keeps his calculations updated so I decided to try to perform them myself. Below is a quote from his site that explains this whole idea best:
Using momentum data derived from relative-strength studies of a basket of currencies, it is possible to calculate an average “exchange rate” involving any two currency families and plot its rising and falling action on a graph. If the rate is rising, the odds favor a long trade in the pair. If the rate is falling, the odds favor a short trade. This is valuable information to have, but by digging deeper into the data we can learn even more.
You can click the link to the left, "Currency Strength" or browse to http://www.forexproject.com/staticfiles/forex_relative_strength.php