The Liteforex index of a particular currency is the rate of influence of a corresponding currency on the basket of main currencies like CHF, JPY, CAD, EUR, GBP and AUD.
This is how they are counted: USDLFX = ((USDCHF * USDJPY * USDCAD) / (EURUSD * GBPUSD * AUDUSD))^(1/7) EURLFX = USDLFX * EURUSD GBPLFX = USDLFX * GBPUSD and so on.
The trading indices are for experienced traders. They evaluate the strength or weakness of one exact currency and to take an overall view on this currency. For example, the two currencies in a pair are traded one against the other, say, EUR against USD. It means that in order to be bullish on EUR you need to be bearish on USD. There would be a problem if your view is that both EUR and USD have plenty of upside potential. However, the trading indices tell you that you do not need to sell the second currency in the pair.
See a table of the currency indexes on the LiteForex website.
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