There is one more thing that you “missed” in “fair” or “true” price:

In an UpTrend:  Price = “true” price + Premium

In a DownTrend: Price = “true” price – Discount

G.

When the market is in a consolidation zone, I now keep it really simple. I think we have to answer only one question, are there any reasons for the price to change the previous trend? The answer doesn’t depend on any market activity, doesn’t matter what “patterns” we see on the chart, only the central banks set the direction. If they don’t say…[Read more]

Thanks a lot for the links everybody! And a special thanks to Simplex for starting a detailed discussion.

First, let me answer your question.

I was using news release as an example of what I’m thinking about. To make it simple, let’s imagine we only have 4 major currencies, EUR, USD, GBP, JPY. So the pairs are: EURUSD, EURGBP, EURJPY, GB…[Read more]

Thanks a lot for the links everybody! And a special thanks to Simplex for starting a detailed discussion.

First, let me answer your question.

I was using news release as an example of what I’m thinking about. To make it simple, let’s imagine we only have 4 major currencies, EUR, USD, GBP, JPY. So the pairs are: EURUSD, EURGBP, EURJPY, GB…[Read more]

I started working on the indicator yesterday and I think I finished to put this theory into test. Feel free to join the discussion here
http://www.penguintraders.com/forums/topic/currency-strength/

I will make a separate thread when I decide to share this indicator.

Excellent results my friend!!  I’m very happy to see that you have put it to good use. Please keep making updates whenever you get a chance. I’m sure we all would love to see how you use it.

I’m making another value/strength based indicator as I’m writing this. I will make a separate thread for it. I think the theory makes very good…[Read more]

Also in addition to what I said before. We don’t necessarily have to look only at news event. Pretty much any place on the chart where we see spikes, I think we should be able to use to measure the currency strengths. Because if there is a spike on EURUSD, others should have the same spike as well, all the EUR___ pairs and USD___ pairs.

This is very good! I have been trading in a similar fashion as well using pivots and simple trend reading and a bit of bull/bear strength analysis in key S/R levels to see to which direction the strength is. Works pretty well I think but have to really take the time to do a proper unbiased analysis because its easy for the brain to be biased and…[Read more]

Keep it up my friend 
The new year sure got most of us pretty busy with many other things but slowly I think most will return back to working on Forex ideas 

That’s great news! Can’t wait to see your results!