Trading the currency markets is a complex business. With so many pairs and multiple timeframes it is almost impossible to monitor them all – but with with the Currency Heatmap you can. The Currency Heatmap indicator delivers the information you need to base your trading decisions on the entire spectrum of currency pairs derived from the 8 major currencies; namely the US dollar, the Euro, the British Pound, the Swiss Franc, the Japanese Yen, the Canadian Dollar, the Australian Dollar and finally the New Zealand Dollar. In one clear and simple table, you can see instantly the entire weight of market sentiment across all 28 pairs and across all timeframes. A global view of risk and sentiment on one chart.
It instantly displays the “hottest” and “coldest” areas of the financial landscape. Vertically, 28 currency pairs are listed and ranked from the most bullish (top) to the most bearish pair (bottom) and reflect the data ranking on the associated currency matrix indicator. And this is where it gets interesting: horizontally, the performance scores of each currency pair are displayed in 9 timeframes namely 1 minute, 5 minutes, 15 minutes, 30 minutes, hourly, 4 hours, daily, weekly and monthly.
Interpreting the colors
Each cell of the Currency Heatmap indicator is color coded making it possible to interpret it instantly with just a glance, much like looking at a sophisticated thermal imagery scanner, but for Forex. If you check out the indicator, you’ll see how easy and intuitive it is, but let’s just expand on them here.
If we start with the performance scores. This is the value the indicator assigns to each currency pair representing how positively or negatively its price moved over a certain period. If you have the Currency Matrix indicator, you’ll also notice that the figures are exactly the same. This is because both use the same algorithm in calculating the performance scores. The cells can be any of the two colors depending on the performance score. This is the color coding used when viewing the currency pairs ACROSS the 9 timeframes or what we like to call the time horizon:
- Green – if the currency pair’s performance score for the aligned timeframe is POSITIVE.
- Red – if the currency pair’s performance score for the aligned timeframe is NEGATIVE.
However, the pairs are then ranked VERTICALLY using a dynamic graded color code transitioning from green, to yellow, and to red in that order. The performance scores of the currency pairs in 9 timeframes are added together. The currency pairs are then ranked by their sum from the most positive to the most negative and are color coded as follows:
- Green shades – the sum of the currency pair’s performance scores in 9 timeframes is well above the fulcrum of zero.
- Yellow shades – the sum of the currency pair’s performance scores in 9 timeframes is relatively flat and around the fulcrum of 0. It can either be positive or negative but trails the numbers closest to 0.
- Red shades – the sum of the currency pair’s performance scores in 9 timeframes is well below the fulcrum of zero.
The gradation of color is dynamic and hence the transition of colors will depend entirely on the sum of the currency pair’s performance scores in 9 timeframes as explained above. As with all our other indicators, this is dynamic and is constantly shifting in real time to reflect the ebb and flow of sentiment across the timeframes.
Weight of the timeframes
One important factor to consider when interpreting the Currency Heatmap indicator and the ranking aspect, is the fact that the performance scores in each timeframe inherently possess weight, and this is reflected in how the indicator has been developed. As you can appreciate, the weight of sentiment in a slower timeframe is greater than that in a faster timeframe. Simply put, the weight of each timeframe is directly proportional to the timeframe itself. Faster timeframes carry less weighting to the overall ranking, whilst slower timeframes carry more. This means currency pairs ranking near or at the bottom of the ladder (bearish) are most likely to have red cells through the slower timeframes or the columns at the right hand side of the indicator. Similarly, the currency pairs at the top and ranking as bullish or very bullish, again are most likely to have green cells through the slower timeframes.
Stepping back, the changing colors deliver a heatmap reflecting the relative performance of the 28 currency pairs across ALL timeframes in real time. This gives a horizontal analysis of the currency pairs across time. Immensely powerful. And empowering you as a trader to make clear, logical and fast decisions.
The Currency Heatmap indicator allows you to filter the currency pairs relevant to the currency you are analysing. Just like the Quantum Currency Matrix indicator, a set of buttons is provided below the table and displayed horizontally.
- USD is the red button which filters out and displays all currency pairs containing the US Dollar.
- EUR is the orange button which filters out and displays all the currency pairs containing the Euro.
- GBP is the yellow button which filters out and displays all the currency pairs containing the British Pound.
- CHF is the green button which filters out and displays all the currency pairs containing the Swiss Franc.
- JPY is the magenta button which filters out and displays all the currency pairs containing the Japanese Yen.
- CAD is the purple button which filters out and displays all the currency pairs containing the Canadian Dollar.
- AUD is the blue button which filters out and displays all the currency pairs containing the Australian Dollar.
- NZD is the white button which filters out and displays all the currency pairs containing the New Zealand Dollar.
The buttons work on a toggle basis. Click them once to filter, and then click again to remove the filter. When a certain currency filter is in effect, the relevant currency pairs in the table appear in square brackets as in [EURUSD].
Here are some further details on the currency heatmap indicator to help you get started:
- Your Quantum Currency Heatmap indicator can be applied to any chart for any currency pair. The chart does not influence or affect the appearance or performance of the indicator. For example, you can apply the indicator to a EURUSD, a GBPUSD, or a USDCHF, or any other pair. The indicator will display in an identical way on each chart AND each timeframe.
- The indicator occupies the chart panel itself. We recommend expanding the chart until you get a complete view of the indicator.
- The indicator works in all MT5 timeframes.
- When you first apply the indicator, please allow a few seconds for the data to build in history. You may need to switch timeframes once or twice before the indicator builds in real time, once the history has been created. This should only occur on the first installation.
- PLEASE NOTE: many FX brokers deliver their MT5 platforms with unique currency pair notations, which vary from the standard notation as in EURUSD, USDJPY and NZDUSD. These unique currency notations can be anything from a full stop, to colon, or letters and numbers and can be either before the symbol (which we call a “prefix”) or after the currency notation (which we call a “suffix”). In either case the prefix or suffix will need to be added when configuring the indicator, otherwise it will not work. This is explained further later in the guide.
By itself, the Quantum Currency Heatmap indicator is a powerful trading tool for identifying trading opportunities, quickly, easily on a single chart. However, its development is part of a new indicator bundle that we like to call the Quantum Currency Dashboard which consists of the following indicators:
- Quantum Currency Strength Indicator (CSI)
- Quantum Currency Matrix
- Quantum Currency Array
- Quantum Currency Heatmap
These four indicators then provide a unique and compact insight into all the various aspects of strength and weakness for both currencies and currency pairs from trend and momentum to overbought and oversold. What is unique is that using four charts you are then able to monitor the myriad combinations of strength, weakness, momentum, congestion and divergence across the entire forex complex at a click of a button. And even more powerfully giving you the confidence to get in and stay in for maximum profits. No more missed opportunities, no more struggling with multiple charts, and no more trader regret whatever your trading style approach.
Applying the Indicator
Open your MT5 platform and in the main menu, select View > Navigator to open the Navigator window which appears at the left hand side of your workspace.
In the Navigator window, expand the Indicators tree by clicking the “+” symbol. Find the Quantum tree and expand it by clicking the “+” once again to reveal the full list of Quantum Trading indicators.
To start using the indicator, you can click and drag QuantumCurrencyHeatmap from the Navigator to a chart or you can also double-click QuantumCurrencyHeatmap (which will then be applied to the currently selected chart). Doing either one of these will display the Custom Indicator window where you can configure all the various user settings for your Quantum Currency Heatmap. These options are grouped and can be accessed by selecting the tabs which will be discussed further in the following sections. Once you are done customizing the indicator’s options, click OK to run the indicator.
You can find here basic information about the indicator like its name, description, and version number.
You can configure the indicator by changing its variables listed in this tab. We will discuss further each configurable input of the Quantum Currency Heatmap below.
The Quantum Currency Heatmap uses graphical objects instead of plot lines so this tab is empty.
The indicator’s visibility can be toggled on or off in different contexts with the options in this tab.
Please make sure that the “Allow DLL imports…” option is checked/ticked before running the indicator. This is required by all Quantum indicators to properly communicate with its accompanying DLL file. Alternatively, you can set this option globally by selecting in the main menu, Tools > Options > Expert Advisors tab and checking/ticking the “Allow DLL imports” option.
Configuring the Indicator
Let’s go back to the Inputs tab and explore the ways on how to customize the settings of your Quantum Currency Heatmap indicator.
When running the Quantum Currency Heatmap for the first time in your trading account, you need to enter the email you used to register in the Quantum Trading Indicators Enablement System – http://enable.quantumtrading.com/ as part of its verification process. You only need to do this once as the email is stored in the terminal’s global variable cache after it is entered initially. Please make sure that you enter your email correctly and exactly without any extra spaces before and after it. If you made an error, simply fill this field again to update it.
This is the number of bars that the indicator processes during the calculation up to the most current bar. The Quantum Currency Heatmap indicator requires a significant amount of processing power compared to most indicators, and this is the recommended setting. The higher the setting then the more processing power is required and we suggest it remains at 7, although you can change this if you wish.
You can change the size of the toggle buttons and the table by changing this setting. This is especially useful for screens with very low or very high resolutions. Its default value is 1 but you can enter negative values to decrease their size further.
You can change the size of the text by changing this setting. Its default value is 8 (it can only hold positive values).
Display Buttons Vertically
The Currency Heatmap displays its toggle buttons horizontally at the bottom of the table by default. Turning this field to true changes their position to a vertical layout at the right hand side of the table.
Use Classic Colors
Instead of using a Green-Red gradient, the indicator switches to a dual color scheme when this setting is true. When using classic colors, all currency pairs with a performance score above 0 are blue and those below it are red. This is set to false by default.
USD Button Color
This setting defines the color of the USD button. Its default color is Red.
EUR Button Color
This setting defines the color of the EUR button. Its default color is Orange.
GBP Button Color
This setting defines the color of the GBP button. Its default color is Yellow.
CHF Button Color
This setting defines the color of the CHF button. Its default color is Green.
AUD Button Color
This setting defines the color of the AUD button. Its default color is Blue.
CAD Button Color
This setting defines the color of the CAD button. Its default color is Purple.
JPY Button Color
This setting defines the color of the JPY button. Its default color is Magenta.
NZD Button Color
This setting defines the color of the NZD button. Its default color is WhiteSmoke.
USD Button Text Color
You can change USD’s button text color from the default White to any color you like.
EUR Button Text Color
You can change EUR’s button text color from the default White to any color you like.
GBP Button Text Color
You can change GBP’s button text color from the default Black to any color you like.
CHF Button Text Color
You can change CHF’s button text color from the default White to any color you like.
AUD Button Text Color
You can change AUD’s button text color from the default White to any color you like.
CAD Button Text Color
You can change CAD’s button text color from the default White to any color you like.
JPY Button Text Color
You can change JPY’s button text color from the default White to any color you like.
NZD Button Text Color
You can change NZD’s button text color from the default Black to any color you like.
Bookmarked Currency Pairs
This is a new feature we added to the Currency Heatmap which helps you keep track of currency pairs you’re interested in wherever they are in the list. To bookmark a currency pair, simply enter its symbol (without any prefix or suffix) in this field like so:
You can bookmark multiple currency pairs at the same time by adding a space between them. For example, if you like to bookmark EURUSD, AUDCHF and USDJPY, simply enter the following value in this field:
eurusd audchf usdjpy
All bookmarked currency pairs are given a different color so you can see them easily in the constantly changing list. They are also not affected by the currency filters.
Bookmarked Currency Pair Color
The indicator gives you the option to change the cell color of the bookmarked currency pair(s). It is set to DarkViolet by default but you can choose any color available in MT4.
Bookmarked Currency Pair Text Color
The indicator also gives you the option to change the text color of the bookmarked currency pair(s). It is set to Yellow by default but you can choose any color available in MT5. Just make sure to pick something in contrast with its cell color.
This is the variable field that you will need to update, if your FX broker delivers your currency pairs with a prefix. As an example this might be a.EUR/USD, in which case you would need to enter the value a. in the Currency Prefix field. If your currency pairs are delivered with a prefix, then you MUST enter this in this field, otherwise your indicator will not work.
This is the variable field that you will need to update, if your FX broker delivers your currency pairs with a suffix. As an example this might be EUR/USDm, in which case you would need to enter the value m in the currencySuffix field. If your currency pairs are delivered with a suffix, then you MUST enter this in this field, otherwise your indicator will not work.
Making Adjustments to the User Interface
The currency buttons are the colored buttons located at the bottom of the table of the Currency Heatmap. This is used to filter out the currency pairs that contain the selected currency. Only one currency can be selected at any time.
A currency is selected if its button is pressed. This filters out all the currency pairs containing the selected currency. In the table, currency pairs matching the filter are colored while the rest are gray (except for bookmarked currency pairs).
This way, you can easily focus on a currency conveniently. Also, your toggled buttons are saved so you can be sure that the same buttons are pressed when you reopen your MT5 terminal.
Removing the Indicator from the Chart
Open the chart’s Indicator List window by pressing Ctrl+I. You can also right-click the chart and select Indicator List from the context menu.
Select QuantumCurrencyHeatmap and click the Delete button then click the Close button.