MT4 indicator (FXRM_Spread_History.mq4)
Download indicator: FXRM_Spread_History.ex4
How to trade with FXRM_Spread_History indicator
An average Forex trader doesn't know about spread spikes that happen during low market liquidity and/or at night, yet this can mean a difference between profits and losses.
Just leave FXRM_Spread_History running, and it'll show you:
- the average spread for each price bar (green)
FXRM_Spread_History can be used on any time frame, no spike will slip away.
On the chart above we've witnesses a few spread spikes that registered around 4-4.2 pips (not much), while the lowest average spread stayed at 1.6-2 pips, and once dropped as low as 1.2 pips.
Spreads are known to spike up to 5-10+ pips at times, which could cause all sorts of trouble to strategies and EAs which assume that spreads should stay within 2-3 pips range all the time. This is where stops are hit and plans go wrong.
If you also think about EA backtesting - the same problem arises - your backtesting will show results that won't account for spread spikes, instead a regular spread will be applied all the time. This is one of the reasons why you won't be able to duplicate the same results in live trading.