The Power of USD indicator for MT4 measures the relative strength of the U.S. Dollar major currency in real-time.
When the relative strength of the USD currency is strong (above the zero level), trade it against a weak currency.
For instance, when the U.S. Dollar is strong and the Euro is weak, sell the currency pair (EUR/USD).
Please note that the U.S. Dollar is the counter currency and the Euro the base currency.
Vice versa, when the relative strength of the USD currency is weak, trade it against a strong currency.
For instance, when the Euro is strong and the U.S. Dollar is weak, buy the currency pair (EUR/USD).
- The U.S. Dollar is considered strong when its relative strength is trading above the 0.00 level.
- The U.S. Dollar is considered weak when its relative strength is trading below the 0.00 level.
Key Points
- Power of USD above the 0.00 level is considered strong. Trade against a weak currency.
- Power of USD below the 0.00 level is considered weak. Trade against a strong currency.
- Confirm the buy or sell trade entry with other analysis tools.
- Works for any Forex pair with the U.S. Dollar included.
Free Download
Download the “Power_of_USD.ex4” Metatrader 4 indicator
Indicator Chart (EUR/USD D1)
The EUR/USD daily chart below displays the Power of USD Metatrader 4 forex indicator in action.
Basic Trading Signals
Signals from the Power of USD Forex MT4 indicator are easy to interpret and go as follows:
Buy Signal: Open a buy trade as soon as the Power of USD relative strength crosses the 0.00 level upwards and the counter currency is weak.
Place a stop loss 5 pips below support or apply your own favorite stop loss strategy for buy signals.
Close the buy trade for a reward/risk ratio of 2.5 or better, or apply your own favorite take profit strategy.
Sell Signal: Open a sell trade as soon as the Power of USD relative strength crosses the 0.00 level downwards and the counter currency is strong.
Place a stop loss 5 pips above resistance or apply your own favorite stop loss strategy for sell signals.
Close the sell trade for a reward/risk ratio of 2.5 or better, or apply your own favorite take profit strategy.
Power of USD Indicator + Zero Lag Moving Average Forex Day Trading Strategy
This day-trading strategy uses the Power of USD U.S. Dollar Forex Indicator for MT4 and the Zero Lag Moving Average Indicator MT4.
The first tool tracks the relative strength of the USD.
The second tool uses a moving average line that adapts faster than traditional MAs:
When the price is above the red Zero Lag MA, the bias is bullish; when below, the bias is bearish.
This combination filters for strong directional moves and helps you day-trade with clarity.
Use on M15 or H1 time frames, in active sessions, ideally on pairs such as USDCHF, USDCAD, NZDUSD.
Buy Entry Rules
- The Power of USD indicator crosses upward through the 0.00 level, indicating USD strength.
- The counter-currency shows relative weakness in the strength meter, or you confirm that the pair is USD vs a weak currency.
- Price is above the red Zero Lag Moving Average, confirming a bullish trend or momentum.
- Enter the buy trade at the market (or at the break of a recent high) once the above conditions align.
- Set stop loss a few pips below the red Zero Lag MA or a recent swing low (for example, 20-25 pips depending on pair volatility).
- Set take profit target of 40-60 pips (or more if volatility supports) or trail the trade while price remains above the MA and the Power of USD stays above zero.
Sell Entry Rules
- The Power of USD indicator crosses downward through the 0.00 level, indicating USD weakness.
- The counter-currency is relatively strong (for example, EURUSD when EUR is strong and USD is weak, or NZDUSD when NZD is strong and USD is weak).
- Price is below the red Zero Lag Moving Average, confirming a bearish trend or momentum.
- Enter the sell trade at the market (or at the break of a recent low) once conditions align.
- Set stop loss a few pips above the red Zero Lag MA or the recent swing high (20-25 pips or adjusted to pair volatility).
- Set take profit target 40-60 pips (or more) or trail while the price remains below the MA and the Power of USD remains below zero.
Advantages
- Combines currency strength (Power of USD) with trend/momentum filter (Zero Lag MA) to improve trade probability.
- Clear rules and visuals: zero-line cross plus price-relative-to-MA give clean entries.
- A day-trading setup means you are in and out within the same session, reducing overnight risk.
- Works well on major USD pairs where one currency clearly dominates the other.
Drawbacks
- In choppy or range-bound markets, the Power of USD may cross zero frequently and the MA may flip bias often, leading to false signals.
- Requires the counter‐currency to show clear weakness or strength; if both currencies are balanced, the signal is weak.
- Spread and cost matter: for day trades, transaction cost can eat profits unless you pick pairs with tight spreads and good liquidity.
- The Zero Lag MA reduces lag but still may lag in extremely fast reversals; you may enter slightly late.
Case Study 1: USDCHF H1 Setup
During a US session hour, the Power of USD indicator crossed above 0.00, indicating USD strength.
At the same time, CHF was showing weakness in broader currency strength tools.
On the USDCHF H1 chart, the price moved above the red Zero Lag MA and held above it.
Entry was placed at 0.9050 with a stop loss at 0.9030 (20 pips).
Price moved up to 0.9110 over the next 3 hours, delivering a 60-pip profit before a minor retracement triggered a move back to the MA and exit.
Case Study 2: NZDUSD H1 Setup
In the early London session, the Power of USD crossed downward through 0.00, indicating USD weakness, while NZD strength was evident.
On the NZDUSD H1 chart price was trading below the red Zero Lag MA.
A sell trade was entered at 0.6200 with a stop loss at 0.6225 (25 pips).
Over the next couple of hours price fell to 0.6140, giving a 60-pip profit.
The price then moved close to the MA, and the signal to exit was taken.
Strategy Tips
- Use the strategy on major pairs with USD involvement (e.g., USDCHF, USDCAD, NZDUSD) where currency strength shifts are meaningful.
- Watch session times with good volatility (London open, New York open) to improve the probability of meaningful moves.
- Check the economic calendar: avoid entering just before major news releases that may distort strength indicators or cause sharp reversals.
- Use a higher-time-frame check (H4) to ensure the major trend supports your day trade direction for added confluence.
Download Now
Download the “Power_of_USD.ex4” MT4 indicator
Adjustable Parameters & Settings
Colors, width, style.
Feel free to explore the indicator’s different parameters and settings to create your own personalized indicator setup.
More Info About This Indicator
Recommended Currency pairs: Any
Trading Platform: MT4
Time Frames: M1, M5, M15, M30, H1, H4, D1, W1
Indicator Type: Currency strength
