Is This Possible in Metatrader?

Is there a way to chart the price difference between two currency pairs in Metatrader to use for spread/pairs trading?

I'm looking for something that actually plots the price difference between two currency pairs such as in the attached example of Texas Instruments and Analog Devices.
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Hmm nothing I have seen, but I can't see why it couldn't be done .... cna you expand a little on what you need exactly?

This sounds very simple, but why would you need something like this?
This can easily be done, however not in terms of price but in percentages.
I think we all know that it would be quite difficult to plot several currency
pairs, with totally different prices, on the same shared scale.
ex: (NZD/USD=0.6200, GBP/USD=1.8400 , EUR/JPY=147.00)

I'm sure using a percentage distance would work also, but the main idea is to see a clear picture of the spread (number of pips difference) between two pairs (their correlation). When combined with some type of Volatility/Regression indicator, these spreads can be timed to purchase a hedged pair at the correct time before they regress back to the mean, which takes predicting the direction of the pairs out of the equation and lets the trader profit on the price difference between the two pairs on a very consistent basis.

By using Volatility Bands or Dynamic or Linear regression bands the trader would have a relative idea of how large the spread is and when to make
better entries and exits.

The links below has some nice examples. I personally like the way the
Volatility Bands in the Neoticker screenshots are implemented.

http://www.traders.<WBR>com/Documentatio<WBR>n/FEEDbk_<WBR>docs/Archive/<WBR>052002/Traders
Tips/TradersTips.<WBR>html

http://www.investop<WBR>edia.com/<WBR>articles/<WBR>trading/04/<WBR>090804.asp

This is a brilliant idea, excite2. So, you need two pairs with a high positive correlation, plotted on the same chart. You can do this with NetDania charts. Then you wait until price diverges with one pair, and enter accordingly. Is this what you had in mind?

If you want to quantify the differences in pips between two highly correlated currency pairs to exploit deviations from the mean I would also suggest importing data into an Excel spreadsheet and doing the calculations that way.

Sistercurare,

Thanks for the compliment, but I can't take credit for this type of trading. Major hedge funds and institutions have been doing this for years to make steady consistent returns on their investments; but they're in no rush to put the word out to the public. They don't have to worry about huge price moves in either direction. They simply trade the narrow price difference between the 2 instruments, which is very predictable in the limits of its movement.

In answer to your two posts; I've tried the Netdania charts previously and while it plots the movement of each currency, it is very hard to interpret the spread using that type of chart. What is needed is something such as the charts I previously posted which will show only the spread difference between the two. And also show be able to add some type of volatility bands to the equation to interpret what is relatively high and what is relatively low in terms of the spread. You can't get that with the Netdania charts.

The excel spreadsheet idea won't work for what I am trying to do because the data needs to be real time data to take advantage of the the situation immediately. Even if Excel can handle the real time data feed, I'd rather keep it in Metatrader if possible.

As Liquid4x stated, it is a very simple indicator to make, but to get one that has all the features shown in the links I supplied is the problem.

If anyone can produce an EA for Metatrader, please let me know! I'm sure its worth the effort!

Thanks.
Excite2

Hey there excite2, Im willing to give it a go, can you give a "simple english" explanation of how you think it should be calculated (not the maths to it, just a plain english explanation), and Ill try to whip something up when I get some free time today.

My guess on the best correlated pairs would be something like the EUR CHF.

Cheers
Akuma99

Thanks Akuma99,

Ideally, the indicator would allow any two currency pairs to be input as a parameter. Once the difference in price (spread) between the two is calculated and plotted, a dynamic volatility indicator would be applied to show whether the current spread is high or low compared to historic spread values.

A picture is worth a thousand words, so if you could take a look at the screenshot and the links I've posted, that should be of great help.

Hope this helps. Let me know if there is anything I can do.

Excite2

FYI, one of my links above got cutoff. The correct link is:

http://www.traders.com/Documentation...adersTips.html

Hi all.
I havent read all replies but i found a site where is possible to overlap 2 pairs in the same chart easily.
http://www.todayfx.com/charts.html

Good trade.

You can do what you are asking about with Dealbook 2 available from several different brokers...GFT or RJO come to mind.

Thanks. I've used Dealbook a few years ago and never noticed this feature.

If I can't get help programming this for Metatrader, I'll take another look at Dealbook.

there is this indicator for the usd. i too usd gft at first, their platform is 100x better then mt4 cept its OCO and it cant auto trade hehe

from this im sure you can figure out how to put any pair on. I have thought about making a seperate chart index indactor for jpy and usd and eur. i would like to normalize them all a bit, this one doesnt do it so well.

Thanks el3, but those charts have the same problem as the Netdania charts. You can overlay two instruments, but you can't plot the spread difference between the two.

Thanks Witchazel. I'll check it out.

AKUMA 99, any luck trying to program this?

Witchazel, do you have instructions on how to use the parameters of the EA? I didn't see any notes listed in the code.

it just uses copies the whole pair datasets in and puts them on chart.
it has to flip some of them , like gbp/usd when using usd/jpy.
it normalizes them a bit, but i think it does it by price cut off and not by percentage.

it does as good of job as GFT. i still think im going to make an "index" tho

Thanks

if you have an account with fx solutions, their new accucharts lets u plot 2 pairs on the same chart and they have a correlation indicator that shows how correlated the pairs are. just like excite said u can get really good entries. ive been researching this method for quiet some time and in testing its proved to be very successful.

if u guys are interested ill post a progress in a journal and post signals/entries. its time consuming for me coz ive been so busy lately and have alot to do comin up but if i could help some people make some money while i make money then why not

just a few people interested would motivate me to do this