The liquidity section provides rough estimates of the trading activity in the forex market. It allows you to understand and view current liquidity and liquidity in previous sessions, in real time. Higher liquidity usually means better spreads as more transactions are being made. The liquidity calculation takes into account many brokers and top 10 traded currencies to calculate the liquidity per each minute for the last 48 hours. You can use the chart zoom in feature to zoom/select a custom timeframe and have the liquidity automatically calculated. The average liquidity of the past 24 hours is used as a 100% liquidity basis for percentage calculation (number of ticks divided by average spread). For example, a 110% reading will tell you that the current liquidity is 10% above the last 24 hours average liquidity.
You can also see the average session liquidity for the last sessions in the table on the left.
Since forex is an "over the counter" market, there is no official data about volume and open interest, so liquidity can be estimated by the number of price ticks and spreads; as an example, a high amount of price ticks and low spread will signify a high liquidity, while a low amount of price ticks and a high spread will signify a low liquidity.
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The currency index represents the evolution of a currency relative to the entire forex. The index is the average of one currency compared to others. The chart representation makes it easy to view trends by currency.
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The Forex Power Indicator is designed to help forex traders save time and boost profits by instantly identifying current trends and potential trade opportunities.
It identifies the relative strength of the major currencies based on daily, 4-hour, 1-hour, and 15 minute timeframes. This relative currency strength is determined based on a highly-developed formula that weights the historical relationships that exist between the various currencies. These relative currency strengths are then used to identify the Top 5 currency pairs that are showing the highest potential for trade.
Just click the required timeframe at the top of the Indicator - either Daily, 4-hour, 1-hour, or 15 minute – and you'll instantly receive two updated graphs that form the basis of this tool.The graph on the left shows the current strength or weakness of each of the 8 main currencies - based on the detailed assessment formula we have developed. The graph on the right shows you the top 5 pairs, from all the combinations of pairs that involve the major currencies, that have been identified as having the most potential for trade.
The identified pair, and whether it's a potential buy or sell, is indicated along the bottom of the graph. The actual graphs show the direction and relative strength of each currency in the recommended pair.
The numbers on the Y-axis of each chart represent average pips movement. For instance, if you're looking at the 15 minute chart and the 'USD' bar is at level '5' on the 'Forex Power' chart, it means it has moved a weighted-average of 5 pips against the other 7 major currencies. Similarly, if the 'EUR' bar is at level -4.5, then it means the Euro has moved down a weighted-average of 4.5 pips against the other 7 major currencies. If the USD has moved up, and the EUR has moved down, then entering a Sell position on the EUR/USD will most likely be recommended in the 'Top 5 pairs' graph on the right.
This tool is not intended to be a complete solution for identifying trades. However it is valuable as a way of identifying currency movements and determining potential trades for further analysis.
Used the right way, it will save you a lot of time and should work as a great addition to your current trade assessment processes.
