The “FuturoFX Spread” indicator is a sophisticated correlation engine that is able to show a projection about future price action, based on the correlations identified in the history. It works on any timeframe and on any financial instrument (currency pair, commodity, future contract) that is available on a MT4 platform.
How FuturoFX Works
It is important to understand the basic principles behind the large amount of calculations performed by FuturoFX. FuturoFX looks at the last N bars on your chart (let’s call them a “recent history block”, or RHB) and then goes back in the past for analyzing all past sequences that are N bars long (let’s call each of this sequences an “old history block”, or OHB). Therefore FuturoFX compares 1 RHB against multiple OHB. This “comparison” is a mathematical computation called “correlation“. The correlation basically measures the extent of correspondence between two arrays of numbers. The result of this mathematical computation is a number between -100 (maximum inverse correlation) and +100 (maximum positive correlation). When the correlation is above a threshold like 70/80 you would easily say that RHB and OHB are “similar”, like in the example below (OHB on the left and RHB on the right):