SpreadMIN: Timing Trades at the Observed Minimum Spread
Summary
SpreadMIN is a chart indicator that records and displays the lowest spread observed during each candle while it is running. The accompanying idea is to delay a trade until the current spread is no greater than the minimum recorded in the previous candle, using a separate script to place a buy or sell order. This can help traders avoid entering when spreads are temporarily wide and reduce spread-related trading costs.
The document recommends using lower timeframes, since waiting for a candle’s minimum spread may take a long time on higher timeframes. It also cautions that the indicator should run for at least a couple of candles before a trade script uses its readings. No performance results or formal comparison with other execution methods are given, and the method only addresses spread conditions; it does not assess price movement, liquidity, slippage, or whether a trade is otherwise desirable.
Key ideas
- The indicator tracks the minimum spread observed within each candle.
- A separate script can wait until the current spread matches or undercuts the previous candle’s minimum.
- Lower timeframes may make it more practical to encounter the recorded minimum sooner.
- The indicator needs to collect data for multiple candles before a script relies on its readings.
- Spread filtering alone does not address price risk, liquidity, or slippage.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.