The following correlations between two or more currencies in FX market are widely used by many traders across the world. CCFp trend follower indicator is based on Moving Averages and aims to measure the relative strength of 8 major currencies against their major counterparts.
The chart below outlines the indicator covering 8 currencies USD, EUR, GBP, CHF, AUD, CAD, JPY, and NZD. Each one of these currencies is represented by a different color line. It is important to note that these lines do not represent Currency indices but their fluctuation relative to each other and currencies are measured in relative units, meaning the sum of all currencies will be equal to zero.
Since, interpreting the 8 limes at a time is not an easy task from the very beginning, it is recommended to select some of the currency lines and make them bold, this way you could see the correlation or trend reversal from these currencies as we have done in the graph above or you can just change the currencies that you do not want to see from TRUE to FALSE, which will eliminate them from being shown on your chart.
How to use CCFp indicator?
Don’t be puzzled about the use of CCFp indicator. It is pretty simple. As it is described above CCFp is a is a trend following indicator thus, stick to the rule of trend following indicators and follow the trend.
If you are trading EURUSD, I would recommend you to take the following steps:
1. Either making EURO and USD related lines thicker or eliminating the irrelevant currencies off your chart
2. Determine and be sure which color represents which currency
3. Look for the slope of the lines on your indicator window
4. Look for a change in the slope of these two currencies (e.g. if EURO is sloping down and USD is sloping up it would signal as a short signal for EURUSD)
5. Crossover of two lines does not necessarily mean a continuation signal, but often turns into a correction point or reversal point
6. Signals occurring when both currencies are in opposite direction of the 0.00 line would have better chance and be far more reliable
How to set up CCFp indicator on MT4?
1. Drag and drop CCFp.mq4 file to your indicators folder on your MT4
2. Restart your MT4 3- Drag and drop CCFp from your list of custom indicators directly on any of your charts
CCFp indicator was sent to us by our users, Ali Jafarov from Azerbaijan. AtoZForex.com does not carry any right over this indicator.
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