Pipsqueaks #28 – Part 1: Interesting Goodies

I do admit I’m a bit of a pack rat. And since it’s that time of year when spring cleaning is just around the corner, I do feel obliged to clean out and cull some of the junk collection at home, and, to a certain extent, the junk data on my PC. Going through my data folders containing indicators and other MT4 tidbits, I can’t even remember what half of them do!. Time to purge some of this stuff! But not the essentials – I do know there are a few gems that I just cannot live without , and that’s what I’m going to talk about today – some of those underappreciated (and possibly overlooked) bits of software that we, as traders, would hate to be without.


I suppose near the top of by short list of MT4 favorites would have to be the Slick Trade Follow The Trend indicator (not to be confused with the Foltron EA). What makes this one so special? It’s basically an indicator that places an arrow in your chart based on a moving average cross. Now MA crosses figure strongly in a great many different strategies, so it’s easy to a certain extent to automate your signaling of a MA cross strategy by simply programming the Follow the Trend indicator. Check out the chart below:

28-1-1 forex emas strategy


In this example we have hourly candles overlaid with a 10 period exponential moving average (EMA) shown in red and a 25 period EMA shown in blue. Notice that when the red line crosses the blue line from above, you get a downward pointing red arrow indicating downward price action; conversely, when the red line crosses the blue line from below, you get up pointing green arrow indicating upward price action. What is really great about this indicator is that you can program it for all sorts of combinations of moving averages (simple, exponential, weighted) and to whatever period you like. See the dialog box below:


28-2-1 forex emas strategy


You can see that the fast EMA is set to 10 in the slow EMA is set to 25, which matches the red and blue lines in the example chart. Another nicety is the option of getting alerts (including email alerts) if you like. This particular indicator comes from the Slick Trade EA file pack available to Slick Trade members, but it’s easy to find similar indicators on the Internet for free. By the way, you can use the indicator without the moving average lines.


Another little gem that no one should be without is a spread indicator, such as the SM_spread2, which also comes from the Slick Trade file pack (but there are many others available on the Internet as well). For those of us new to Forex, the spread is the difference between the bid (buy) price and the ask (sell) price of a financial instrument (or currency pair), and can range from just under a pip to literally hundreds of pips, depending on the financial instrument being traded. So why is it important to know what the spread is? Well, if you going to enter a trade in the market, in order to derive a profit from it the trade has to close the gap in the spread (to breakeven) and move beyond that point to make a profit. If you’re looking for a 10 Pip take profit on a potential trade, and the market is currently showing a two pip spread in your currency pair, you’ve got to gain 12 pips to hit your target. So it’s important to know what the spread is because it’s constantly changing. It’s desirable to enter trades when the spread is small, say a pip or two, as opposed to being, let’s say, a half-dozen or more pips. Certain times of the day or week are rife with very large spreads, such as market open on Sunday afternoon (that is, if you live in North America as I do). Spreads also tend to enlarge as the New York exchange closes each day during the week. Here’s what the indicator looks like on a chart:


28-3-1 forex emas strategy

Another one of my favorites is an expert advisor called Vr Stealth Pro, and it’s a free download through the MT4 market. To access the MT4 market, open a terminal window in MT4 and click on the market tab, then search for Vr Stealth Pro. One of the neat things about obtaining indicators and expert advisors in this fashion is that they’re automatically installed for you. Now, what does this one do? Well, it’s a little control panel that automates placing trades. With one click you can place a market (or pending) order, complete with take profit and trailing stops. You can drag the control panel anywhere on the chart. I like it for placing pending orders a given distance from current price action. Here’s what it looks like on a chart:

28-4-1 forex emas strategy


Pretty neat, huh?


That’s all for today, in part two I’m going to show you a neat little trick you can do with one of MT4’s basic indicators, the MACD. Until then take care, and good luck in the market!

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