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 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 this information for trade opportunity.

How to Use?

The best results are obtained when the trade is opened somewhere between the second and the third standard deviation.

• Indicator is between the 2nd and the 3rd standard deviations - SELL Pair 1, BUY Pair 2
• Indicator is between the -2nd and the -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

Main Features

• 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, and 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

Input parameters

• 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
• Dev_Period - Period of deviation for calculation
• Text_Size - Size of other currency labels
• Line_Thickness - Thickness of chart lines
• Line_Color - Color of Pairs Spread line

Outputs parameters

• Spread - Spread output values

For more information, visit the PipTick Pairs Spread product page.