Multi Stochastic – multi-currency trading indicator

Multicurrency trading indicator

We all know classic MetaTrader4 oscillators, such as Stochastic and Relative Strenght Index (RSI):

 

But what happens if you try to combine the data of the two indicators into one? And if we add to this analysis of correlated currency pairs? You will get a hybrid indicator for manual trading Multi Stochastic.

This indicator was created primarily to analyze the total movement of currency pairs in a particular currency in order to make a profit when trading a group of symbols. Multi Stochastic is suitable for those traders who are ready to go beyond trading one pair and start using a basket of orders.

 

As we know, the market has a correlation of currency pairs and movement on a stronger currency can be observed periodically on all pairs with it. Thus, the release of important political news on the dollar will affect EURUSD, GBPUSD, N’DUSD, AUDUSD, USDJPY, USDCAD, USDCHF, ie. all pairs with USD, which is quite logical. By combining all these pairs into one indicator, we will be able to see a complete picture of the currency movement, as well as diversify the risks of trading a basket of orders from different currency pairs. The indicator is easy to install and set up. The graph shows the total curve of movement on the specified characters. Dark gray is marked with indicator data for each particular pair.

 

Indicator settings:

UseBasket Choose which pair basket to use to build an indicator. The list contains 8 major currencies Symbols USD, Symbols GBP… – the list of pairs used to build the average line, are specified through the point with a comma (;)   
Color Summary Line The color of the main average line of the indicator.
BarsForAnalyze Number of bars to build an indicator
IndicatorLevels Show the levels of the indicator. A lower value is set, and the top is calculated as 100 minus this value. Ie. 30/70 lines will be displayed at level 30.
Stochastic Indicator – standard settings of the Stochastic indicator
StoKPeriod Fast solid K. It is the main line. At 0, the stochastic indicator is not used for calculations.
StoDPeriod Slow dotted D. Is the average moving K.
SlowingPeriod Additional smoothing of the indicator
StoMethod Choosing a method for calculating the moving average. 
RSI Indicator – RSI settings
Use_RSI In true position, the RSI indicator with the StoKPeriod period is used. If both oscillators are active, their values are summed up and divided into 2.

As we can see, the indicator can build its readings separately on Stochastic or RSI, and calculate the average between them, which will reduce the number of signals, but increase the accuracy of the input. You can apply 8 different currency baskets in trading. Here are examples of the use of the indicator on the three main baskets using the example of classic strategies:

Overbought/Oversold Strategy

The main signal line of the indicator is fixed and is above the level of 80, it is an entry signal for a particular currency. All orders for groups of pairs with the same trading lot are opened at once:

USD basket:

Buy USDCAD, USDCHF, USDJPY.
Sell EURUSD, GBPUSD, AUDUSD, NZDUSD

JPY basket:

Sell AUDJPY, CADJPY, CHFJPY, EURJPY, GBPJPY, NZDJPY, USDJPY

GBP Basket:

Sell EURGBP
Buy GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPNZD, GBPUSD

Mirror for level 20. The entry direction on other baskets is carried out on the same principle.

The exit occurs either when the opposite level is crossed, or when a given value of the total profit or loss in the deposit currency is reached.

Motion entry strategy

1) Indicator above 55, but below 65, the line goes from the bottom up:

USD Basket

Buy USDCAD, USDCHF, USDJPY
Sell EURUSD, GBPUSD, AUDUSD, NZDUSD

JPY Trash

Sell AUDJPY, CADJPY, CHFJPY, EURJPY, GBPJPY, NZDJPY, USDJPY

GBP Basket

Sell EURGBP
Buy GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPNZD, GBPUSD

Exit when the line reached 80.

 

2) Indicator below -45, but above -35, the line moves from top to bottom:

USD Basket

Sell USDCAD, USDCHF, USDJPY
Buy EURUSD, GBPUSD, AUDUSD, NZDUSD

JPY Trash

Buy AUDJPY, CADJPY, CHFJPY, EURJPY, GBPJPY, NZDJPY, USDJPY

GBP Basket

Buy EURGBP
Sell GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPNZD, GBPUSD

We leave the position when the line is below 20.


Stop Loss and Take Profit in the system is not exposed, because trading is conducted by a basket of orders and it is not possible to calculate the desired value for each pair. When you leave, you definitely need to close all orders in the basket. You can use third-party advisors to maintain orders, which will forcibly close all your positions when you achieve a given percentage of income or loss from the deposit. The risk for the entire basket of orders should not exceed 5 of the deposit.

Also for risk lovers in the system can be used averaging, i.e. additionally open a second basket of orders when a certain equity loss is reached.


As you can see, the strategy for the Multi Stochastic indicator is peculiar and at the same time very flexible in characteristics that can always be adjusted to your personal trading method, add additional filters and indicators.

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