MT4 Spread Indicator
MT4 Spread Indicator is one of the essential indicators that every trader needs to succeed in the act of forex trading. Since the understanding of spread plays a vital role in entering or exiting a trade, it becomes inevitable to have this tool handy.
One of the reasons some traders fail to make a profit in the market is because they don’t plan their strategies well. The type of trader you are will determine the spread to use in the long run.
In this article, we shall take a look at what Spread Indicator is, the importance of knowing the spread, features and advantages of the indicator, how the indicator works, how to install it, how to use the spread indicator, etc. Read everything on our Best MT4 Indicators website!
What is MT4 Spread Indicator?
Spread MT4 Indicator shows the present spread in the major window of the chart. The font parameters, the spread value normalization, and the position of the indicator are adjustable.
Following each tick, there is a redrawing of the spread, to ensure the most recent and active spread value. Brokers who have changeable spreads or spreads that are often expanded find this helpful. You can permit a spread label to display close to the present Bid line.
The importance of knowing the spread
The kind of strategy a trader uses determines his level of cost-sensitivity, even as the degree to which traders are cost-sensitive varies. Your level of consciousness about the size of the spread increases if you are trading more frequently or you are using s shorter trading style. The size of the spread will not be too important to you if you are a long-term trader who aspires to make many pips over periods of weeks, or months.
However, the size of the spread could be the decider between a profit and loss, especially if you are a scalper or day trader. Your cost of a transaction is going to increase if you are often entering and exiting the market. To cut cost, make sure you trade during those periods when the spread is most favorable.
One way to ensure a good result and increase safety is to use a combination of top 10 mt4 indicators and then use supplementary tools to verify the results of your primary indicator. You can use a spread indicator as the last sifting tweak, to guarantee that you are trading at the right time. This is mostly helpful to those who trade regularly. You can combine this spread indicator also with the best volume indicator on the market.
Features of MT4 Spread Indicator
Some of the features of Spread Indicator include the following:
1. It automatically sums the cost per lot in the currency you choose
2. It displays the value of the spread in pips
3. The color system is based according to the cost level
4. The amount of the spread is shown as a percentage of the average range in different timeframes.
Advantages of Spread Indicator
1. It is handy in comparing fluctuations in spreads between different forex brokers.
2. The indicator is user-friendly and highly efficient.
3. It can be used in all markets (stocks, forex, indices, commodities, etc.) and timeframes.
4. It is free of charge.
5. You can use it to quickly measure minimum, average, and maximum spread of any forex or other markets, within any timeframe.
How the indicator works
The timeframe that you choose determines the results of the spread indicator. For instance, the indicator draws 1-minute bar if it is added to the M1 chart.
The spread indicator calculates the following:
1. The minimum for a particular period, depending on the timeframe.
2. The average spread for a specified period, depending on the timeframe.
3. The average spread right from the start of measuring.
4. The maximum spread for a certain period, depending on the timeframe.
5. Buy/sell swap values.
6. The minimum spread from the start of the measurement.
7. The maximum spread from the start of the measurement.
How to install the Spread indicator
1. Download the MT4 spread indicator
2. Copy the spread indicator
3. Resume your MetaTrader 4 client
4. Choose the chart and timeframe where the MT4 indicators are to be tested.
5. Search “Custom Indicators” in the Navigator.
6. Right-click on Spread Indicator
7. Add to a chart
8. Adjust the settings or click Ok
9. The Spread Indicator is now ready for use.
How to delete the Spread indicator
To delete the MT4 Spread Indicator, take the following steps:
1. Select the chart in your MetaTrader 4, where the indicator is running.
2. Right-click the chart
3. Click the “Indicators list.”
4. Chose the indicator and delete it.
5. The indicator is now removed.
How to use the Spread Indicator
Traders use the values of the spread indicator as a guide to decide whether the time is ideal to trade the currency pair if the spread is low. Traders should be patient for a high spread to come down before opening a position. TIP: You can combine the spread indicator with the premium gold indicator MT4 to get better entries.
Using the spread indicator enables the trader to visualize the present spread in point and its proportion compared to various timeframes. The relative cost can be analyzed by taking a look at the spread proportionally to the average range. For example, in a currency that moves 400 pips daily, 4 pips spread is more economical than to trade 2 pips spread in a currency that moves only 100 pips a day. The spread in the first case is 1% of the daily range, whereas, in the latter, it is 2% of the daily range.
The rule of thumb here is to avoid buying if the spread is over 25% of the real timeframe’s range. The trader can minimize his instant loss if he is buying one lot of the base currency, by merely taking a look at the cost/lot.
How to calculate the Forex Spread and Costs
You get the cost of a spread by subtracting the bid price from the ask price. For instance, if the bid price is 1.14511, and the ask price is 1.14516; the spread is 1.14516-1.14511 = 0.00005 or 5 pips.
If you use the quotes above, you will understand that we can presently buy the EUR/USD at 1.14516 and close the transaction at a selling price of 1.14511. This implies that the trader is going to incur 0.5 pips of spread immediately the trade is open.
To get the total spread cost, multiply this value by pip cost, putting into consideration the total amount of lots that were traded. If you were to trade a 10k EUR/USD lot, the total cost you incur would be 0.00005 (0.5 pips) X 10,000 (10k lot) = $0.5.
On the other hand, trading a standard lot (100,000 units of currency) would amount to a spread cost of 0.00005pips (0.5pips) X100,000 (1 standard lot) = $5.
0.5 (Spread in pips) x $1 (Pip cost per 10k Lot – $0.5 (Spread cost)
Conclusion Of MT4 Spread Indicator
Making profits in the forex market requires some patience, skills and use of specialized tools. Spread Indicator is a tool every day trader or scalper needs to have in his forex arsenal.
There is no need trying to do everything manually when there are tools to make things easier and more profitable for you.
This platform has several indicators and tools that will help improve your trading skills and enable you to take profits and minimize losses in the long run, so look at it via this link. Take advantage of them today and start trading like a professional.
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