The Bullish Percent Index & EUR/CHF: The Hidden Market Signal No One Talks About

Why Most Traders Overlook This Market Goldmine (And Why You Won’t)

Traders love flashy indicators like RSI, MACD, and Bollinger Bands. But what if I told you that one of the most underrated, stealthy market indicators—the Bullish Percent Index (BPI)—could give you a massive trading edge, especially when analyzing EUR/CHF?

Most traders ignore BPI because they don’t understand it—or worse, they think it’s just another market breadth indicator. But here’s the truth: understanding BPI in relation to EUR/CHF can uncover game-changing opportunities that the average retail trader completely misses.

Let’s dig into the hidden mechanics behind BPI, why it’s secretly powerful, and how to integrate it into your EUR/CHF trading strategy for a next-level trading edge.

What Is the Bullish Percent Index (BPI) and Why Should You Care?

Quick definition: The Bullish Percent Index measures the percentage of stocks (or currency pairs) in a given market that are currently generating a Point and Figure (P&F) buy signal. It’s typically used in equities, but Forex traders can use a modified approach to apply it to currency pairs like EUR/CHF.

How It Works in Forex:

• Instead of stocks, we analyze a basket of EUR and CHF-related currency pairs to gauge whether the overall sentiment favors buying or selling EUR/CHF.
• If more pairs show bullish signals for EUR than CHF, we can expect EUR/CHF to rise.
• If CHF-related pairs dominate with bullish signals, EUR/CHF is likely to fall.

Why It Matters:

• BPI acts as a contrarian signal. If the index is extremely bullish (>70%), it could indicate an overbought market and a potential reversal.
• It helps filter out noise. Rather than relying on single indicators, BPI provides a broad, sentiment-based perspective on price action.
• It gives traders a hedge against fake breakouts. When combined with other tools, it significantly increases accuracy in trend confirmation.

EUR/CHF and BPI: The Secret Correlation

How to Construct a BPI for EUR/CHF:

To build a customized Forex Bullish Percent Index for EUR/CHF, follow these steps:

1. Select a Basket of Related Pairs:
   • EUR/USD
   • EUR/JPY
   • EUR/GBP
   • EUR/CAD
   • EUR/AUD
   • CHF/JPY
   • USD/CHF
   • GBP/CHF
   • AUD/CHF
2. Use Point & Figure (P&F) Charts:
   • Identify whether each of these pairs is in a bullish (buy signal) or bearish (sell signal) mode.
   • Calculate the percentage of pairs in bullish mode.
3. Interpret the Results:
   • Above 70%: EUR is strong—potential exhaustion or reversal point.
   • Below 30%: CHF is dominant—EUR/CHF could be bottoming out.
   • Between 30-70%: Mixed signals—use confirmation with other tools.

How to Use BPI in Your EUR/CHF Trading Strategy

1. Spotting Overbought & Oversold Conditions

• If the BPI is at 80% or higher, EUR strength is excessive. Look for signs of a EUR/CHF reversal to the downside.
• If the BPI drops to 20% or lower, it signals CHF dominance—watch for EUR/CHF to bounce upward.

2. Trend Confirmation & Divergences

• If EUR/CHF is rallying but BPI is declining, this suggests a weak uptrend and a potential fake breakout.
• If EUR/CHF is falling but BPI is rising, the downtrend might be losing steam, and a bullish reversal could be coming.

3. Combining BPI with Other Indicators

Pair BPI with:

• RSI (Relative Strength Index) – Look for divergences to confirm price exhaustion.
• Volume Analysis – Low volume with a high BPI could indicate weak momentum.
• Economic Events – If a major CHF-related event occurs (e.g., SNB policy shift), compare BPI levels to price action.

Real-World Example: EUR/CHF and BPI in Action

Let’s say EUR/CHF has been in a steady uptrend, but your custom Forex BPI suddenly drops from 72% to 48% over two days. This means fewer EUR pairs are showing bullish signals, indicating weakening momentum.

Instead of blindly holding onto a long EUR/CHF position, you could:

• Scale out of your position to lock in profits.
• Use a trailing stop to protect gains.
• Wait for confirmation (e.g., RSI divergence) before re-entering a trade.

This subtle shift in market sentiment could help you avoid getting trapped in an early trend reversal.

Final Takeaways: How to Gain an Edge with BPI & EUR/CHF

By now, you should see why most traders completely ignore BPI to their own detriment. If you integrate BPI into your EUR/CHF strategy, you’ll:

✅ Gain early warning signals of trend reversals.

✅ Filter out fake breakouts.

✅ Improve risk management by spotting overbought/oversold levels.

✅ Increase your confidence in trend strength and sustainability.

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Image Credits: Cover image at the top is AI-generated