CSS indicator - with full power of currencies for your profit

Hello, friends traders! Today we will address the topic of currency power. There are always pairs that move sluggishly while others show strong trends. Why is it? That’s because one of currency pairs in the active pairs is strong and the other is weak. And if we know which currency is the “favorite” now, so the profit is not far off. The advanced indicator Currency Slope Strength will help us in it.

The CSS indicator is designed to measure the relative strength of currencies. In the first versions, the indicator has measured the strength of only two currencies on the chart. But, later, the author found a different algorithm, which allowed measuring the strength of all currencies relative to each other. The main advantages of the indicator are simplicity to use it and unambiguous signals. Any strong deviation from zero (positive or negative) means the advantages of one currency over another. The intersection of the zero is a change of a trend. Despite their simplicity, these signals have great potential and many years of experience of professional Forex traders.

Characteristics of the indicator

Platform: MetaTrader 4
Currency pairs: All
Timeframe: H4, D1
Trading hours: around the clock
Recommended Brokers: Roboforex

The principle of operation of Currency Slope Strength indicator

The indicator compares the strength of each currency separately over all the others. In this regard, if you, for example, compare AUD with USD, EUR, GBP, JPY, CHF, and NZD, then after removing Australian dollar from the list of pairs, you can get dramatically different chart of the currency power. For example, to measure the strength of the pound you should add angles of inclination of all pound pairs: GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPUSD, GBPNZD, EURGBP. The resulting sum is divided by the number of pairs, and we obtain the mean value of GBP power. The same processing is applied to all the specified currencies.

The algorithm of TMA indicator is used in this calculation. CSS determines the power of momentum by the angle of inclination of TMA lines. Positive angle value means that prices go up, negative means that prices go down. Depending on the angle CSS determines the power of the movement. That is, the steeper the angle is, the stronger price momentum will be. A zero tilt angle means the absence of pronounced movement. Since the indicator shows the strength of the currency, the reversal of the lines means a decrease in the rate of growth only, but not a reversal of a trend. That is, if the angle is greater than zero and is increasing, then the growth rate of prices increases. The indicator reversal and the beginning of the movement back to zero, instead, means a decrease in the rate of growth. CSS does not use the angle of the TMA channels directly and converts them using your own algorithm, as the average values of TMA greatly slow down the reaction of the indicator. Therefore, unlike TMA indicator, CSS quickly responds to the change of the price.

Signals

Before using the indicator in practice, it is important to understand what exactly it measures. The indicator is designed primarily to measure the relative strength of currencies, i.e. the advantage of one currency over another. The indicator does not predict the volatility, so the actual price movement after receiving the signal may be minimal or may cause a long-lasting trend. Currency with a stronger inclination has a greater potential to grow. Even if the value of the angle of more powerful currency starts to decline, the currency still has great potential, as the value of its inclination is more.

Crossing of the lines

The crossing of two lines indicates a change of trend direction. The indicator signals about the crossing of the vertical line against the values of currencies. If showCrossAlerts is enabled, in addition to this, you will hear an audible signal.

Crossings are divided into 4 types:

1. Both lines are located outside of the channel. This suggests that one currency is starting to slow down, and the other, on the contrary, is starting to speed up. This signal can precede the emergence of a strong movement in the market, and can be a good moment to open a position.

2. The crossing was near the zero point within the channel. Since both currencies, in this case, have no explicit movement, you should not expect the big profits from such a signal. It can serve the beginning of the formation of ascending or descending trend. The better tactic is waiting patiently for further developments.

3. One currency is inside the channel, and the second is out of range. The signal has average power, indicates the formation of a new trend.

4. One currency goes beyond the upper limit of the channel when the second breaks the opposite border. As a rule, it precedes the formation of long trend movement. It is not necessary that the crossing occurred at one point, a period from one crossing to another one can take days or even weeks. In any case, this is a good signal for entering a position.

Parallel movement

The currency pair is in a flat when the two currencies start to move parallel to each other. In this case, the direction doesn’t matter – currency could simultaneously rise or fall simultaneously. In this case, the stronger currency has advantages – the one that is higher on the chart (relative to zero).

Crossing of the channel boundaries

One of the main signals is crossing the lines +20/-20. Green and red dots indicate the crossing of the lines, respectively.

Channel breakout says about the early formation of the trend movement. If you are trading with breakout strategy, the output of the channel will help you to determine which currencies are preparing for a breakdown and what direction they will move.

Settings

• autoSymbols – when this setting is enabled, the indicator automatically takes into account all symbols available in the market overview. It replaces the parameter symbolsToWeigh.
• symbolsToWeigh – a list of currency pairs for calculation (separated by commas).
• maxBars – the number of bars to calculate. 0 - to disable restriction.
• nonPropFont – selection of a monospaced font.
• addSundayToMonday excludes Sundays from calculations if the daytime period is selected.
• showOnlySymbolOnChart – disables the display of all currencies, except those that belong to the current symbol.
• autoTimeFrame – selects the current chart’s timeframe automatically. Replaces the parameter timeFrame.
• timeFrame – installation of a timeframe. Supported values are M1, M5, M15, M30, H1, H4, D1, W1, MN.
• extraTimeFrame – additional timeframes to be displayed on the chart.
• ignoreFuture – disable redraw.
• showCrossAlerts – enables full-time alert when crossing lines.
• differenceTreshold – changes the background color of the indicator to red or blue, depending on what currency is above if the spread between lines is increased more than a predetermined threshold and showOnlySymbolOnChart is enabled.
• showLevelCross – displaying of channel lines.
• levelCrossValue – value of the channel lines.
• cur – enables displaying of certain currencies.
• color – changing the color for certain currencies.

Examples

Example 1.

As you can see, JPY and NZD often move in parallel, which is shown on the chart in the form of short flat areas. After another consolidation, the JPY is sharply pulled forward, and then it intersects with NZD and breaks the upper border of the channel that is the signal on the formation of a long downtrend for NZDJPY.

Enter at the crossing of the lines. Set Stoploss at the maximum of the previous movement. Because the signal is quite strong, the profit can be 2-3 times more than Stop.

Example 2.

A similar example on GBPUSD. While the pound is weakened, the dollar is gaining position. Crossing occurs outside the channel +20/-20, which indicates a clearly pronounced trend of the dollar; it is a good moment to enter a position, even without supporting signals. We set Stop at the top of the previous trend, or at the local maximum. Take-profit is 2 times more than Stop.

Conclusion

Due to the fact that the fundamental principle is laid down in the indicator, that is a measurement of the power of currencies, it can be freely used in combination with almost any other trading strategy. Moreover, when used properly, CSS is quite suitable as a primary trading instrument as it allows estimating the capacity of a particular currency in a pair at the initial stage of the trend movement. The product has passed a long evolutionary way, to be like now. This development is a good example of the close collaboration of true experts in their field – experienced programmers and professional Forex traders.

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