Introducing the Quantum Currency Strength Indicator
The Quantum Currency Strength Indicator has been designed to show you easily and quickly when a currency is moving strongly in one direction or another, either to an oversold state, or to an overbought state. Currencies and currency pairs move constantly from one to the other in all timeframes.
These are the points at which a currency is likely to reverse and change trend. The overbought and oversold regions on the indicator are defined by the dotted lines at 20 and 80 and once these regions are approached then this is a signal for further analysis on the chart. Using the indicator in multiple timeframes is an excellent way to see whether a currency is rising or falling across several timeframes, adding a further dimension to your analysis, and allowing you to quantify the risk on any trade in a more detailed way.
Whilst the indicator has been designed to show you when currencies are potentially overbought or oversold, the CSI will also show you when currencies are in congestion phases as they meander and bunch together. Typically this is seen ahead of major news releases as the currency markets pause and wait before the release.
Finally, the indicator will also help you to monitor current positions, with the indicator showing you when a currency has moved from one extreme to another and perhaps signalling a potential reversal in the opposite direction.
- Your Quantum CSI currency strength 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 GBP/USD, a EUR/USD, or a USD/CHF, or any other pair. The indicator will display in an identical way on each chart.
- The indicator will work in all MT4 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 realtime, once the history has been created. This should only occur on the first installation.
- PLEASE NOTE: Many FX brokers deliver their MT4 platforms with unique currency pair notations, which vary from the standard notation which is a comma following the currency pair as shown here: EUR/USD,M1 for example. These unique currency notations can be anything from a full stop, to colon, or letters and numbers, and can be either before the currency notation (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 in the installation process below, and when any suffix or prefix is added it MUST be precise, and also include any spaces.
- The grey dotted lines at the top and bottom of the indicator (80 at the top) and (20 at the bottom) are not designed as an entry or exit signal. They are simply there to give a guide as to when a currency is approaching or moving into an oversold or overbought region, in that timeframe.
By itself, the Quantum Currency Strength 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 QuantumCSI from the Navigator to a chart or you can also double-click QuantumCSI (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 CSI. 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 CSI below.
All the plot lines of the Quantum CSI can be configured in this tab. It contains 8 lines, each represented by one of the 8 major currencies: USD, EUR, GBP, CHF, JPY, CAD, AUD, and NZD.
Quantum CSI uses 2 levels to determine whether any currency is either overbought or oversold. These levels are defined here in this tab. A currency is overbought if it approaches or crosses above the level of 80. A currency is oversold if it approaches or crosses the level below 20. You can also change the color and the line style in this tab.
This tab contains options to change the scale of how the indicator is displayed in the chart. We do not recommend changing any of the values here and it is best to just leave it as it is.
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 CSI.
When running the Quantum CSI 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. The CSI 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 80, although you can change this if you wish.
This setting is used to “fine tune” the internal RSI indicator of the Currency Strength Indicator. Increasing the value makes the indicator less responsive to price movement, thus the steepness of the curves decrease. A higher RSI Period also means that currencies are less likely to cross the 80 and 20 lines. Conversely, decreasing it, makes the indicator more responsive to price movement, thus the steepness of the curves increase. A lower RSI Period also means that currencies are more likely to cross the 80 and 20 lines and also stay there for longer periods of time. The recommended settings are between a minimum of 7 and a maximum of 14. For medium to longer term trading approaches then the higher RSI Period is recommended (towards 14 or the default), whilst for faster scalping trading approaches, then a lower RSI Period can be applied (towards 7).
A new feature that we have introduced in the Currency Strength Indicator for MT5 is an alert system for currency crosses which has been requested by some of our customers who are interested in taking advantage of trading opportunities found in it. A currency cross happens when one currency line intersects with another which indicates a significant price action between the two currencies.
It is set to false by default but when changed to true, you will be prompted through an alert box about all the currencies that have crossed after the current bar closes. Please note that this feature does not notify you of unconfirmed crosses or those that happen in the current bar.
Turn this option to true (default value is false) to allow the indicator to relay its alerts to your mobile device through push notifications. You can learn more about MT5’s push notification feature in the following links:
- MT5 IOS Push Notifications Help: https://www.metatrader5.com/en/mobile-trading/iphone/help/push
- MT5 Android Push Notifications Help: https://www.metatrader5.com/en/mobile-trading/android/help/push
This setting is used to toggle the visibility of the numerical values of each currency found just beside its respective line.
Each number is colored the same as the currency it represents and shows its exact value within the 0 to 100 range. Its default setting is true and is therefore visible whenever you run CSI. You can turn this off anytime by switching it to false.
You can change the size of the toggle buttons 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.
Button Font Size
You can change the size of the text inside the buttons by changing this setting. Its default value is 8 (it can only hold positive values).
The CSI displays its toggle buttons vertically by default. Changing it to true changes the position of the buttons to a horizontal layout.
USD Line Color
This setting defines the color of USD’s plot line and button which is Red by default.
EUR Line Color
This setting defines the color of EUR’s plot line and button which is Orange by default.
GBP Line Color
This setting defines the color of GBP’s plot line and button which is Yellow by default.
CHF Line Color
This setting defines the color of CHF’s plot line and button which is Green by default.
AUD Line Color
This setting defines the color of AUD’s plot line and button which is Blue by default.
CAD Line Color
This setting defines the color of CAD’s plot line and button which is Purple by default.
JPY Line Color
This setting defines the color of JPY’s plot line and button which is Magenta by default.
NZD Line Color
This setting defines the color of NZD’s plot line and button which is WhiteSmoke by default.
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.
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 left hand side of the chart.
Each button corresponds to one of the lines of the indicator with its respective color. Each button contains the symbol of the currency and its most current value in parentheses. Clicking a button toggles the visibility of the line it corresponds to.
- If the button is NOT PRESSED, the corresponding currency line is visible. In this state the button is colored.
- If the button IS PRESSED, the corresponding currency line is hidden. In this state, the button is black.
This way, you can easily focus on a currency or group of currencies conveniently. Also, your toggled buttons are saved so you can be sure that the same buttons are pressed when you reopen your MT4 terminal.
Expanding the Indicator’s Screen Size
To expand the indicator to full size so that it fills the chart, these are the steps to follow:
- Hover your mouse pointer over the double horizontal lines marked with the red arrows above
- A small icon of two parallel lines with the words ‘click drag a border of the window’
- HOLD down the left click on your mouse, and drag these lines to the top of your chart, and release when done
- Hover your mouse over the right hand edge of the chart until a double headed arrow appears
- HOLD down the left click on your mouse, and drag the right hand edge of the chart across to the left and release when done
- Left click on the chart to make it the active window
- Left click on the zoom icon below, to expand your currency strength indicator to full size. The zoom function is shown below and is found in the standard toolbar below the top level navigation.
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 QuantumCSI and click the Delete button then click the Close button.