Methodology
Everything we publish — and every score you see in the tool — comes from the same framework, computed from real market data. No black box, no "trust us." This page explains how each indicator is built, what it draws on, and what its limits are.
Data sources
- Prices and volatility (ATR): Twelve Data, with a historical-volatility fallback derived from ECB price history when needed.
- Interest-rate differentials: FRED (St. Louis Fed). If the data isn't available, the carry component stays neutral rather than being invented.
- Reference exchange rates: Frankfurter / European Central Bank (free, no key).
- Positioning: the COT (Commitments of Traders) report and retail-trader bias.
Each input refreshes on its own cadence (prices every few hours, volatility and macro on longer windows) to reflect the market without hammering the sources.
MRS — Market Readiness Score
What does it measure? Whether conditions favor a trade right now. A 0–100 reading. It doesn't tell you what to buy; it tells you whether the ground is prepared.
Components (weight):
- Volatility / ATR — 30
- Active session — 25
- News calendar — 20
- Macro backdrop — 15
- Positioning — 10
How do you read it? Higher = more favorable conditions. It's a composite, not a crystal ball: it distills several signals into one number so you can decide.
CTS — Carry Trade Score
What does it measure? How supportive the current environment is for a carry trade. The engine is the interest-rate gap you're paid — or charged — to hold a pair overnight, but the score weighs that gap against session and news-risk context, so it reads the carry environment rather than the swap you will be credited.
Components (weight):
- Interest-rate differential between the two currencies (the engine of carry) — 50
- Active session — 30
- Pair ranking — 20
- News-risk penalty
How do you read it? It runs from "no carry" to "strong." A strong carry is not a buy signal — it's one more piece of context.
FSI — Forex Strength Index
What does it measure? The fear-and-greed thermometer of the FX market. A 0–100 composite.
Components: institutional positioning (COT), volatility, the VIX, retail-trader bias, and some carry and news risk.
How do you read it? From "extreme fear" to "extreme greed." The extremes are the most interesting moments to watch — but an extreme reading is not a reversal signal. Extreme sentiment can persist for a long time in a strong trend.
FOTSI — currency-strength oscillator
What does it measure? It splits a pair into its two halves so you can see which currency is really pulling. It's built on each currency's TSI (True Strength Index).
How do you read it? When two currencies diverge sharply, the pair between them shows the clearest directional contrast in the FOTSI framework. Readings past ±50 mean momentum is unusually extended — not that a currency is overvalued, and not that a turn is due.
→ Read the full FOTSI explainer
How the four scores work together
Each score answers a different question:
- FSI — what risk-sentiment regime is the market in?
- FOTSI — which currencies are showing strength, and which are lagging?
- CTS — is the environment supportive for a carry trade?
- MRS — are conditions suitable for trading at all right now?
They are complementary, not independent votes. Several inputs are shared: news risk feeds MRS, CTS and FSI; the active session feeds MRS and CTS; volatility feeds MRS and FSI; positioning feeds MRS and FSI; carry feeds CTS and FSI. Only FOTSI runs on an input the others do not use — per-currency momentum.
That overlap is deliberate. A risk-off wave genuinely does raise volatility, shift positioning, make carry less attractive and lift news risk all at once, so several scores moving together is often the same market reality seen from different angles.
But it has a consequence worth stating plainly: "three of the four are bullish" is not three confirmations, and it is not a probability. When the scores agree, check whether they are agreeing because of one shared input before you treat it as independent evidence.
How we produce our content
Our analysis and explainers are written with the help of language models (AI), always under human oversight and fact-checked against market sources (the economic calendar, news feeds, and the data above) before publishing. We spell this out in our editorial standards.
Every score is computed transparently from the sources cited above. If something looks off, email us at contact@forexcommand.com — we'll look into it.
None of this is financial advice. Trading foreign exchange carries a real risk of capital loss. More about who we are on About.
