Spread Trading

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Spread Trading

Postby Apprentice » Mon Sep 06, 2010 2:57 am

Spread.png

Spreads show the difference in price between two securities.

A spread Trading involves buying one security and selling another (currency pair).
Profit opportunities arise from the narrowing or expanding of the difference between the two securities.

Spreads are typically constitute between securities with high correlation.
Exploit temporarily disrupted relationships between securities.

Opening at the same time Long & Short position we expect that one of securities will rise faster (or fall more slowly) than the price of other.

You can also spread a single security, by buying one contract and selling another with different maturity.

Spread.lua
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Re: Spread Trading

Postby fxm12000 » Fri Oct 29, 2010 2:23 am

Thank for a great indicator. Is it possible to make a signal out of it, with sound and email alert when spread touches or crosses defined value?
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Re: Spread Trading

Postby Apprentice » Fri Oct 29, 2010 4:24 am

Good suggestion.

I asked all the traders who are interested in Spread Trading,
to require from FXCM, the possibility of trading with spreads.
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Re: Spread Trading

Postby Apprentice » Sun Dec 05, 2010 4:18 pm

Currency Selector added.
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Re: Spread Trading

Postby fxm12000 » Sat Apr 02, 2011 12:55 pm

Is by any chance possible to add third pair in spread indicator. I would like to have indicator that will give chance to trade for example eurusd buy/gbpusd sell and cover them with eurgbp sell . And collect profit when declining from normal corelation.
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Re: Spread Trading

Postby Apprentice » Sat Apr 02, 2011 4:07 pm

I'll try to find some solution for this type of trading.
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Re: Spread Trading

Postby Apprentice » Mon Apr 04, 2011 4:35 am

ThreeCurrencySpread.png

I have written two versions.
ThreeCurrencySpread according to your specifications.
And a bonus one.

But I'm not sure what is their usefulness.
ThreeCurrencySpread.lua
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TwoSpreadSpread.lua
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Re: Spread Trading

Postby alepan72 » Mon Apr 04, 2011 7:04 pm

Hi all!
I used this indicator and seems to be nice tool for correlation trades. Is there someone explain me how I recognize a point of entry?
(e.g. on a chart with EURJPY and USDJPY the indicator is on 35.500. Which direction I have to follow?)
I will appreciate duly each help. (PM allowed).
Thanx in advance! Kisses from Greece!!!

usdjpy.png
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Re: Spread Trading

Postby Apprentice » Tue Apr 05, 2011 2:14 am

In theory.
Find the two currency pairs with high correlation and high current Spread.
Then open the two positions, One Short and One Long.
Direction that you will take depends on long-term trend that you expect,
Is Spread Negative or Positive.
First Pair Long Second Short or First Short and Second Long.
Since you expect that spread will decrease.
On a trade will be profitable, second will not, overall you should be in profit.
Here there are several parameters such as the rollover.
It is possible to realize the trade with a one-sided position.

I can tell you more.
This is not a trading forum, our primary mission is programming support.
Not give trading advice.
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