Currency Strength Indicator

Currency Strength Meter Tool

CSM or currency strength meter is an online tool that gives you overview what is the current strength of specific currency on the market.

The tool is based on the live currency rates that are gathered from the financial market and then combined with other currencies to determine the strength of the currency.

How the Currency Strength Meter Works

The graph below shows an overview how the currency strength meter works. 

The graph consist of several currencies that are listed on the left side.

On the right side you can see the strengh of that currency compated to other currencies on the graph. 

The currency that has green bar on the right side is stronger than the currency on the left side where the red bars are.

The currency strength is calculcated on the daily basis where currency close price has been used to calculate the strengh among all listed currencies.

How to Use CSM?

As an example lets take EUR and GBP currency pair where we have two currencies together. The currency strength meter shows the EUR and GBP currency strength wher the Euro is stronger than Great British Pund.

To use the CSM properly you would look for the EURGBP currency pair and look to trade EUR against GBP. Because EUR is stronger than GBP so the price of Euro would gain in value.

The best way to trade with the CSM would be to find the stronger currency and the weakest currency. That can be Fiat currency or cryptocurrency. Cryptocurrency strength meter is also visible on the graph where the most popular crypto currencies are.

If we take a look on the graph below we can see that GBP is the most stronger currency. And NZD, New Zealand dollar, is the weakest. 

So, if we want to trade GBPNZD we would buy GBP and sell NZD to get the most out of this pair. Because we can expect that GBP will rise in value and NZD will fall in value.

With currency strength meter we get advantage on the market where we use this information to determine future currency pair movements.

This prediction would give us correct signal which we use to trade.

Mistakes to Avoid

Using only CSM app is not the best way to determine the direction of a currency. ANd the main reason is that CSM app is not 100% bullet proof tool, but it is an additional tool you can use in determining currency strength.

To avoid the mistake using only CSM app you should use aditional tools to determine the strength of a currency.

One of those tools are news about currency in the pairing you are using.

News about economy health would benefit in deterining the currency strength. Economy that is good gives background to a healthy currency which will increase the strength of the country currency.

Additional tools to use in determining the currency strength are technical tools. Those tools are support and resistance levels where the analyst can mark them on the chart use to increase the accuracy of a currency strength.

When combining several tools with CSM the analyst would get much better insight about the currency strength.