Product Code: FuturoFX
Availability: 1
$9.90

FuturoFX Indicator

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 FuturoFXFuturoFX 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):

 
When the correlation is below a threshold like -70/-80 you would say again that RHB and OHB are similar, however they are just specular, like in the example below (OHB on the left and RHB on the right):
 
 
FuturoFX by default looks only for strong positive correlations between RHB and OHB. However the user can also change the settings in order to take into account both positive and negative correlations.
 
Usually FuturoFX finds a number of OHB that show a “good” correlation with RHB. The next step is analyzing the M bars just after each OHB (let’s call each of them OHB_future), in order to build a projection of M bars in the future of RHB (let’s call it RHB_future). The average of the best OHB_future sequences is shown by FuturoFX in a coloured trail (red tomato by default), while the absolute best OHB_future sequence is shown by FuturoFX as a sequence of bars (yellow by default).

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