The FX AlgoTrader FX Index Analyzer Pro package provides near real-time full timeframe FX index data for Forex Traders. The data is calculated by the FX AlgoTrader server based on LiteForex Index formulae.
Currency index data provides traders with a unique ability to analyse the forex market from a macro level rather than analysing individual forex pairs.
By comparing index data for all the forex major currencies over multiple timeframes traders are able to make accurate, quick and informed decisions regarding the best pairs to trade. No serious forex trader should be without some form of forex currency strength analysis or metering tool!
The index data is calculated using LFX currency index formulae published by the LiteForex brokerage service. The Index data is calculated in real time from spot FX rates on the FX AlgoTrader server and streamed to the subscriber on their local machine. Update frequencies are approximately every 10 seconds.
The screenshot above shows near real-time index data by timeframe for each currency. Table cells with a blue background represent positive index values (strength) and table cells with a red background represent negative index values (weakness).
It's very important to understand the way the index data changes based on timeframe as this will help to define sensible filter criteria. Each timeframe is based on MT4 timeframe data ie M1 index data is based on 1 minute MT4 chart data. M5 index data is based on 5 minute MT4 chart data etc etc.. Therefore at the start of each 5 minute period the M1 and M5 index data will have the same value for the first minute of the new 5 minute period.
M1 and M5 Index data read the same value at the start of a new 5 minute period. This will happen a XX:00,XX:05,XX:10,XX:15 etc etc
A minute later (at XX:01,XX:06,XX:11,XX:16 etc etc) we see the M1 and M5 index data are no longer the same as there is a new M1 period and the M5 period is still building / forming /incomplete
The trader has the option to analyse historical index data by timeframe and look back period. Here the trader is analysing the weekly index data for AUD, NZD and CHF pairs over 3000 sample periods (hours)
Graphical index analysis can provide exceptional medium/long term trade opportunities by pairing strengthening currencies against weakening currencies. During testing several hundred pip plus medium term trades were identified using graphical historic index analysis.
Significant differential between AUD and NZD historical index data. This analysis has echoes of a pairs trade / arb for two generally highly correlated currencies (note... currencies not currency pairs)
Two 1 lot long positions opened for AUDUSD and and AUDNZD on 02/03/2021 and 03/02/2021 respectively achieved pip based profits of 114 and 182 respectively ($1485.75 AUD $1692.74 AUD based on 1 lot positions each) Trades were inadvertently auto closed by a risk controller during testing but paper based profits were actually significantly higher at various points during the trade as shown in the screenshot below for AUDNZD
Index data auto sorted into strength and weakness order by timeframe. The timeframes those used as standard in MetaTrader 4
Trend Filters allow the trader to set up custom depth filters accross multiple timeframes
Applied filters shown on the strength and weakness table. The M30 timeframe has a red background on the strongest and weakest currency as it's been set as the 'Alert Timeframe' in the Alert Controls and AutoTrading section.
Long and Short Candidate Pools
The screenshot above shows the Long and Short candidate pool area. The Trend Filters control the depth of the filter for each timeframe within the selection pool. The minimum filter depth is 1 and the maximum is 3.
Here we can see the H4 trend filter has been set to a value of 1 so the weakest and strongest positions are highlit with a grey background in the H4 column of Long and Short selection pools in the Strength/Weakness table
Here we can see the H4 trend filter has been set to a value of 2 so the two weakest and two strongest positions are highlit with a grey background in the H4 column of Long and Short selection pools in the Strength/Weakness table
Qualifying Filtered Currencies
In order for a currency to meet the filter criteria it must appear in all of the selected filter timeframes in the Long or Short candicate pool respectively
In the screeenshot above we can see GBP is within all of the active filter timeframes in the Long Candidate Pool
GBP displaying in Qualifying Filtered Currencies under the 'Long' category due to GBP being in all of the active filter timeframes in the Long Candidate Pool
Index Analyzer Pro has two filter types which are: "Follow" and "Buy Dip / Sell Rally"
The 'Follow' filter type
If we look in the Qualifying Filtered Currencies section of the program (bottom right of screenshot) we can see JPY is in the Short category and NZD and AUD are in the Long category. If we examine the Strength/Weakness table (top left of screenshot) we can see JPY (circled in blue) is in all of our filter critera in the Short Candidate Pool and similarly AUD (circled in black) and NZD (circled in red) meet all of our filters in the Long Candidate Pool
The system then creates an alert for pair combinations made up using this data which we can observe in the screenshot below
The Alert History window shows two "Long" alerts triggered at 13:50 for AUDJPY and NZDJPY. The system features a module called 'Pair Maker' which constructs forex pairs based on the data in the Qualified Filtered Currencies section
The 'Buy Dip/Sell Rally' filter type
The 'Buy Dip/Sell Rally' filter type is designed to pinpoint dip buying / rally selling opportunities. For a currency to qualify as a Short candidate the currency must be all grey filter zone within the Short Candidate Pool and also in the red filter zone within the Long Candidate pool. In the screenshot above we can see CHF meets this requirement and has therefore been added to the Qualifying Filtered Currencies section as a 'Short' candidate.
Similarly, for a currency to qualify as a Long candidate the currency must be all grey filter zone within the Long Candidate Pool and also in the red filter zone within the Short Candidate pool. In the screenshot above we can see GBP is in the M15 and W1 filter zones but not in the MN1 filter zone. Therefore it does not qualify as a 'Long' candidate as it doens't meet all of the filter criteria.
Traders can create pre-defined profiles for the system and apply them quickly and easily using the 'Load Profile' button. Profiles can be created at any time with ease by clicking the 'Save Profile' button which will load a Windows Explorer session prompting for a profile name
For traders wishing to autotrade the signals created by Index Analyzer Pro we provide an optional MT4 Expert Advsior which has been developed as a 'listener' to detect and execute Index Analyzer Pro trading signals. The MT4 EA is called 'FXA - Index Analyzer Pro AutoTrade EA' and is designed to be run on a single chart in MT4. The EA should be loaded onto a high volatility forex pair as the EA is triggered from MT4 tick data.
List of EA Parameters and descriptions
|Broker_Suffix||Where brokers use a suffix after the forex pair eg GBPUSDxy - 'xy' should be entered|
|Global_Risk||Specified as a percentage of account equity. If any position exceeds -X% of the MT4 account equity it will be closed automatically|
|Lots||Sets the position size for all trades triggered from Index Analyzer Pro signals|
|Stop_Loss_In_Pips||Sets the stop loss level for all trades triggered from Index Analyzer Pro signals|
|Take_Profit_In_Pips||Sets the take profit level for all trades triggered from Index Analyzer Pro signals|
|Max_Simultaneous_Order_Per_Pair||Set the miximum number of simultaneous/concurrent open orders for any pair opened by Index Analyzser Pro|
|Mimimum_Interval_Between_Trades||Specified in seconds - sets the minimum allowable interval between each trade executed by Index Analyzer Pro. System used the previous order open time as it's base value.|
|Allow_Hedging||If set to true, the EA will open both long and short positions. If set to false, the EA will only allow positions in the same direction. So if there's an existing long position the system will only allow long trades. Vice versa for short positions|
|Pair Traing Control||Here the trader can control which forex pairs can be auto traded. Any pairs marked as 'true' will be allowed for autotrading by the EA.|
|Platform Independence for analysis purposes||Traders can use Index Analyzer Pro for analysis purposes without requiring an underlying trading system. Index Analyzer Pro retrieves it's index data directly from the FX AlgoTrader web server.|
|Macro view of the Forex Market with ultra fast opportunity identification||Once trader's learn how to interpet the Index data they can immediately see where the flow is within the market. It takes just seconds to read the auto-sorted strength and weakness table to see which currencies are the strongest and weakest respectively. As of todays data (11/03/2021 09:19) I can immediately see the AUD is the strongest currency on a daily timeframe basis and JPY is the weakest. So a pretty good place to look for opportunites is the AUDJPY pair - long trades based on AUD weakness... the chart below confirms the analysis... that tool about 30 seconds!!|
|AutoTrading (Optional Extra)||For traders looking to autotrade based on their custom filters entry signals. We are looking forward to developing this facility further based on customer feedback. The EA autotrade option will be offered on a reduced price basis during the early stages of the product release.|