Spread Warner indicator – constant monitoring of spread changes
Spread is the difference between the price of buying and selling an asset, which is sometimes also called the broker’s commission, although it is not. The broker is just an intermediary, which outputs trades to liquidity providers who set the size of the spread. The broker shows the client the final quotes, which include the liquidity provider’s spread and the markup – the broker’s commission added to the spread. In order not to complicate the life of traders with terminology, the spread is understood as the broker’s commission.
Spread Warner indicator: essence and settings
The spread can be fixed and floating. The floating spread can narrow and widen depending on market liquidity and trading volumes. The less liquidity, the less market participants, the greater the volatility, the wider the spread. The Spread Warner indicator helps to track the dynamics of its change.
Spread Warner is needed for the following purposes:
- To track the moment of a sharp spread widening… The trader can find out the real size of the spread only at the moment of opening the order. Its minimum value for an individual asset is indicated in the specification. Spread Warner shows the size of the current spread and the dynamics of its change, for example, at the moment of touching key price levels or the release of economic statistics.
- To control the actions of the broker… There are cases when a broker unilaterally increases the size of the spread. The trader sees this only at the moment of closing the deal. And if an increase in the spread by 1-2 points with a target profit level of 15 points is unpleasant, but not critical, then in scalping a profitable trade can turn into a losing one.
An abnormal widening of the spread is a signal not to open a trade until a reason is found.
Spread indicator settings Spread Warner:
- Buffer Length – the number of bars in the spread histogram.
- Collect Spread – setting to display a new column at the moment when the spread value changes.
- Indicator Position – default panel setting.
The rest of the settings are related to color display and other minor features.
Spread Warner is not the only spread indicator. For example, another common script is Spread Session Indicator. It displays the change in the spread value at the time of the close of each subsequent candle. There is no fundamental difference between all these tools, so download the first working archive. If you need help installing the spread indicator or need its template, write about it in the comments after the review. We will definitely help you!
Conclusion… Spread indicators are auxiliary scripts that track the dynamics of changes in the difference between the Bid and Ask prices. The indicator window is small – it is located in the corner of the chart, does not distract, does not close quotes. The tool is recommended:
- fundamental analysis traders;
- traders working with several different assets;
- traders working with multiple brokers.