iSpread is a spread indicator for pairs trading - MetaTrader 5 Script - MT4/MT5 Resource

Using this indicator you can create synthetic symbols based on two selected currency pairs.

The indicator algorithm is as follows:

That's all we need to do to prepare the data and create synthetic symbols. This is what we did:

We use EUR/USD:

We use GBP/USD:

This is a composite symbol:

The final step is to determine the bias required to find the entry point:

But after an initial series of two or three good divergences, you can start to trust the levels. As data accumulates, normalized extreme values ​​are not lost.

Method 2 (called extreme levels) - tracks only the absolute maximum deviation and divides it into 3 levels to enter the market.

The characteristics are the same as normalization - it is not recommended to trust such levels until stable extreme values ​​are received.

When using this method we see the following picture:

There is one significant advantage to drawing levels using any of the above methods - the levels will not shrink. But there is a drawback - if a peak occurs, subsequent calculations are guided by it. To remove it, the indicator also has a parameter called the level coefficient (it is just a factor that allows you to manually narrow or expand the entry level).

Method 3 for drawing horizontal planes - Calculation of standard deviation. This method has not yet been implemented in the indicator because it leads to a narrowing of the levels, which is unacceptable in my opinion. Therefore, the horizontal plane looks like an ever-shrinking and expanding bubble. Unfortunately I can't provide a screenshot because I have removed this calculation method from all indicators. Another disadvantage is that you have to constantly check all available data to calculate it all correctly.

P.S. This indicator has been migrated from MetaTrader 4 to check some ideas in the multitester, but with some notes:

Attachment download

📎 ispread.mq5 (16.72 KB)

Source: MQL5 #2197