PipTick Pairs Spread indicator has been developed for the very popular strategy known as pairs trading, spread trading or statistical arbitrage. This indicator measures the distance (spread) between prices of a two directly (positively) correlated instruments and shows the result as a curve with standard deviations. So, any trader can easily identify when the instruments are too far apart and use it this information for trade opportunity.
How to you use PipTick Pairs Spread indicator?
Best results are attained when the trade is opened somewhere between the second and the third standard deviation.
Indicator is between 2nd and 3rd standard deviations - SELL Pair 1, BUY Pair 2
Indicator is between -2nd and -3rd standard deviations - BUY Pair 1,SELL Pair 2
Suitable currency pairs
EURUSD vs GBPUSD
EURUSD vs NZDUSD
USDCHF vs USDJPY
AUDUSD vs GBPUSD
AUDUSD vs EURUSD
The indicator shows the deviations from normal state
Simple comparison of actual correlation between two currency pairs
The second and third standard deviations area for entering the trades
Works on every timeframe (M1, M5, M15, M30, H1, H4, D1, W1, MN)
The indicator is non-repainting
Ready for backtesting (customizable look-back period)
Customizable parameters (Colors, Line thickness, Deviations period...)
Very fast calculation
Indicator works with prefix and suffix of symbols as well (EURUSD.m, EURUSD-pro...)
Available for MT4 and MT5
Pair_1 - Name of the first pair
Pair_2 - Name of the second pair
Bars_Ago - Number of bars displayed by the indicator. In case Bars_Ago parameter is set to 0, all bars in chart have been displayed