Currency Strength Index CSI

Currency Strength Index (CSI)

The Currency Strength Index (CSI) is a multi-currency momentum indicator designed to measure the relative strength of the 8 major currencies:

EUR, GBP, AUD, NZD, USD, CAD, CHF, JPY

Instead of analyzing a single pair in isolation, this indicator calculates the underlying strength of each currency by mathematically combining all 28 major cross pairs.

🔬 How It Works

The CSI:

Uses a Linear Weighted Moving Average (LWMA) of price

Measures the percentage change of the LWMA

Combines 7 cross pairs per currency

Applies mathematical decorrelation

Produces a normalized strength value

Displays results in a separate window for clean comparison

Each currency’s value reflects its aggregate momentum across the entire FX market, not just one pair.

📊 What It Shows

8 real-time strength lines

Zero line equilibrium reference

Toggle on/off for each currency

Top-right display showing:

Base vs Quote strength difference

Clear directional bias

Example:

“AUD stronger than CHF by 2.47”

🎯 How To Use It
1️⃣ Trade Strong vs Weak

Buy the strongest currency against the weakest.

Example:

Strongest: AUD

Weakest: CHF
→ Look for AUDCHF longs

2️⃣ Confirm Trend Strength

If a pair is trending and:

Base currency is strengthening

Quote currency is weakening
→ Higher probability continuation

3️⃣ Avoid Weak Momentum

When currencies cluster near zero:
→ Market likely ranging or low conviction

⚙ Inputs

MA Period – Controls smoothing

MA Delta – Controls sensitivity

Currency visibility toggles

Lower delta = faster reaction
Higher period = smoother lines

💡 Why This Is Different

Most “strength meters” use simple averaging.

This CSI:

Uses mathematical pair inversion logic

Accounts for base/quote structure

Uses weighted momentum

Reflects broader intermarket flow

You are trading currencies — not just pairs.

⚠ Disclaimer

This tool measures momentum and relative strength.
It should be used alongside structure, liquidity, and risk management.