— A Birds-Eye View of the Forex Market —
The Fibozachi Forex Force™ (FFF) is a suite of highly specialized Indicators that have been designed to provide Forex traders with a significant edge over the competition. Unlike the equity markets, the Forex market has a limited number of trading instruments (currencies). It is therefore possible to perform intensive data comparisons between each of the various currencies to obtain extremely valuable and otherwise ‘hidden’ information. This information can then be used to exploit the Forex markets for extremely favorable trade setups… which is precisely what the Forex Force Indicator are designed to do.
The algorithm behind the FFF references all major currency pairs/crosses (every combination of the EUR, GBP, USD, JPY, CHF, CAD, AUD, NZD) to provide traders with a comprehensive diagnosis and breakdown of the following:
- Currency (Pip) Strength: Currencies that are the strongest & weakest
- Correlations: Currencies that are trading in tandem or oppositely
- Stochastics: Currencies that are the most OverBought & OverSold
- RSI: Currencies that have the most/least relative strength and momentum
- DMI: Currencies that are in bullish uptrends or bearish downtrends
- ADX: Currencies that are trending or consolidating sideways
- Average True Range (ATR): Currencies that are the most and least volatile
- Verticality: Currencies that have upward, downward or sideways price movements
FFF™ Pip Strength Indicator
FFF™ Correlations Indicator
FFF™ Stochastics Indicator
FFF™ RSI Indicator
FFF™ DMI Indicator
FFF™ ADX Indicator
FFF™ ATR Indicator
FFF™ Verticality Indicator
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The Fibozachi Forex Force™ (FFF) includes the following:
FFF Pip Strength
FFF ATR (Avg. True Range)
The Fibozachi Forex Force™ algorithms generate accurate and precise measurements by analyzing and comparing the price movements of every single major currency cross across the entire Forex market. All of the measurements are then synthesized into composite values that provide invaluable ‘hidden’ information that is needed to gain an edge and exploit the Forex markets for extremely favorable trade setups.
The various Forex Force Indicators utilize a complex, proprietary algorithm that accurately calculates the strength of each major currency on the Forex market. We specifically use the term “accurately” because the formula that it employs is entirely objective, unbiased, and both technically and mathematically sound. All other indicators that attempt to do similar tasks determine “currency strength” using subjective methods that incorrectly assign arbitrary and meaningless “strength ratings” to each currency. As a result, these ratings do not accurately reflect the true strength of the various currencies, which is extremely dangerous to Forex traders who rely on these flawed methods.
The FFF Pip Strength Indicator is the only forex indicator that accurately diagnoses the strength of each currency because it uses a performance-based approach that is based upon the net amount of pips that each individual currency has gained or lost in the previous “N” number of bars or since the start of the user-defined session. Not only that, but the FFF also incorporates this same approach to provide traders with objective and unbiased measurements of Correlations, Stochastics, RSI, DMI, ADX, ATR and Verticality for each and every currency.
The Flexibility of the Forex Force Indicators
It is extremely important to understand that the FFF is designed for ALL kinds of FX traders, from intra-day scalpers to long-term investors. The underlying calculations and principles always remain the same regardless of the timeframe being used, which makes the FFF suitable for all styles of FX trading.
The following sections provide descriptions of the various Indicators and explains why they are so valuable and beneficial to FX traders. Keep in mind that the term “user-defined session” only applies to intra-day FX traders, so it is important that you understand that these values are universal and are therefore applicable to any timeframe.
The FFF PIP Strength Indicator displays the total amount of pips that each currency has gained or lost since the start of the user-defined session (or the most recent “X” number of bars). It provides traders with a precise number that accurately gauges the performance and strength of each currency throughout the course of the trading session.
Example 1: Positive Pip Strength
► If the “PIP Strength” of the EUR is +179, it means that the EURO has gained 179 pips when compared against every possible currency cross.
Example 2: Negative Pip Strength
► If the “PIP Strength” of the USD is -43, it means that the EURO has lost 43 pips when compared against every possible currency cross.
Knowing how many pips each individual currency has gained or lost during a trading session is the most effective and unbiased way of determining the strength of each currency. This allows FX traders to easily identify the strongest and weakest currencies so that they can avoid trading currency crosses that do not offer an adequate amount of profit potential.
The FFF Pip Strength Indicator also includes a second text column that displays which specific currency crosses have the maximum and minimum (max/min) Pip Strength values for each individual currency. This enables traders to know exactly which currency crosses have gained the most pips and lost the most pips out of all possible crosses.
Maximum Pip Strength Currency Cross
► The USDEUR has a higher Pip Strength value than any other USD cross and so it is displayed as the “Max” Pip Strength value for the USD alongside its current value (112 Pips).
Minimum Pip Strength Currency Cross
► The USDNZD has a lower Pip Strength value than any other USD cross and so it is displayed as the “Min” Pip Strength value for the USD alongside its current value (-27 Pips).
*** The USD currency crosses being analyzed are as follows:
EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, NZDUSD
The FFF Correlations Indicator displays the correlation between each currency since the start of the user-defined session (or the most recent “X” number of bars). It provides traders with positive or negative correlation values that are based on the direction of each currency’s price movement (positive correlations indicate that both currencies tend to move in the same direction whereas negative correlations indicator that both currencies tend to move in opposite directions).
► If the Correlation value of the EUR:CHF is 0.25, it means that the EURO and the Franc will move in the same direction approximately 25% more often than the opposite direction. It is important to understand that it does not imply that the EURO and the Franc move in the same direction 25% of the time.
► If the Correlation value of the EUR:JPY is -0.23, it means that the EURO and the Yen will move in the opposite direction approximately 23% more often than the same direction. It is important to understand that it does not imply that the EURO and the Yen move in the opposite direction 23% of the time.
Knowing the correlations between each and every currency cross during a trading session is the most effective way of determining which specific currencies trade in tandem and which trade inversely or oppositely. This allows FX traders to easily identify which currencies should be paired together and which crosses to avoid, since there is little profit to be gained from trading two currencies that have an extremely high positive correlation (move in the same direction). More importantly, it is much easier to trade a currency cross that often moves vertically instead of horizontally (chop or consolidation).
The FFF Correlations Indicator also includes a text column that displays which specific currency crosses have the maximum and minimum (max/min) Correlation values for each currency. This enables traders to know exactly which currency crosses are the most ideal for trading and which should be avoided.
Maximum Currency Correlation
► The EURCHF has a stronger positive correlation than any other EUR cross and so it is displayed as the maximum correlation value for the EUR alongside its current value (+0.67).
Minimum Currency Correlation
► The EURNZD has a stronger negative correlation than any other EUR cross and so it is displayed as the minimum correlation value for the EUR alongside its current value (-0.42).
*** The Euro currency crosses being analyzed are as follows:
EURGBP, EURUSD, EURJPY, EURCHF, EURCAD, EURAUD, EURNZD
Want to see the rest of the Forex Force Indicators that have been specially designed to provide FX traders with a significant edge?
Click on the User Guide below to learn about ALL the FFF Indicators and how they will benefit your FX trading!
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