The SWFX index shows the relationship between the quantity of long and short positions opened on the main currency pairs by Dukascopy's traders and by the most popular liquidity providers.
How it works: the SWFX index can be used as an additional filter to help approve or disapprove signals from intraday strategies such as MACD (moving average convergence divergence) or the crossing of price lines with moving averages. If a strategy gives you a buy signal on the EUR/USD pair, and the EUR/USD and EUR SWFX indices are overbought, you would avoid opening a position. If a strategy indicates that you should sell GBP/USD and the GBP/USD and GBP indices are overbought (or neutral), then your probability of having a successful trade increases.