IndEX EA is the first commercially available strategy based on trading multiple forex indices. The EA is fully self containted and back testable. The strategy trades pairs when one of the index component strengthens and the other weakens. Trades are entered when there is enough room for movement to acheive gains of over 150 pips. The EA needs to be attached to one chart only - Identifies and trades multiple pairs automatically.

IndEX MT4 EA is a platform for trading multiple currencies from a single chart based on currency strengths rather than individual pairs price action alone. The IndEX EA is a highly scalable platform to add additional pairs for trading using various strategies while keeping the relative strengths of currencies in view.

IndEX EA created currency index for EURO, GBP, USD, YEN and Swiss Franc. The index values are derived from price feed of various pairs in real time (updated every hour at new bar open). The index values are calculated using an proprietary algorithm developed by Phibase in which index values are created for each currency by calculating its relative strength. The currency Index is comparable to various trade-weighted effective exchange rate index. Based on the progression, The currency Index is used to identify the strength or weakness of a particular currency and its flow direction.

IndEX EA V2x is currently enabled for trading seven pairs : GBPJPY, EURJPY, USDJPY, EURUSD, GBPUSD, EURGBP and XAUUSD. The commercial version of the EA which will be launched in October 2018, will have option to trade more pairs (AUDUSD, OIL, etc).

Yen provides excellent oscillations between being strong and weak. This gives rise to potential of trading it across various other pairs like EURO, GBP and USD.

The GBP/JPY pair is a highly volatile currency combination, defined by large movements in price relative to most other pairs. The IndEX EA trades the volatility of this pair based on the relation between Yen/USD and GBP. The complex interaction between the three currencies are analysed and high probability trades with a minimal profit goal of +200 pips are taken. IndEX EA is very successful in trading this pair on H1 time frame.

The USD/Yen is the second most liquid currency pair, often idling along at a particular level before a rapid movement to a different price level. Trading the USD/JPY requires enormous amounts of patience. IndEX EA trades USDJPY on the daily timeframe and based on breakouts and reversals at extreme levels. The USDJPY pair provides good support to the IndEX portfolio and plays a crucial role in achieving the quarterly gain targets of the strategy.

EUR/JPY currency pair is a safe haven trade and sees very strong movements. The peculiar nature of the EURO - Yen relationship makes it an ideal pair for IndEX strategy to make momentum and trend based trades on daily timeframe. EUR/JPY also provides good trading liquidity and spreads are low across all brokers. The relationship of EURO against safe havens currencies like CHF, Yen and USD are used to identify major trends and momentum based entries.

EURUSD, GBPUSD and EURGBP (only one open trade of these pairs allowed at any point of time). EURO + GBP Index moves will be traded on moving 24 hour time frame. Trades will be executed either on EURUSD or GBPUSD or EURGBP depending on the pair providing most reliable signal. Trading EURUSD/GBPUSD will be based on strength or weakness of USD index. If EURGBP trade will be executed if the EURO and GBP index well defined inverse index directions.

Trading Gold is based on trading USD weakness and Gold breakouts on the H1 timeframe. The success rate is about 51% with R/R of 1:1.5 - trading frequency averages about 5 trades per month. Gold has always been a risk sentiment instrument and provides good moves - INDEX EA is able to provide consistent gains using its strategy based on USD Index and its relative movement to other pairs. As part of the INDEX portfolio, trading Gold is an excellent choice since the XAUUSD pair has very weak correlation to five pairs (GBPJPY, EURJPY, USDJPY, GBPUSD and EURGBP). The pair has a stronger correlation to EURUSD, but the INDEX strategy trades EURUSD based on INDEX values of EURO and GBP and its strategy is highly uncorrelated to the strategy used to trade Gold.

Since trading is based on actual index movements and directions, much of the price action within the daily trading range of the pair is considered noise. The strategy is able to filter out most weak signals and false breakout - trades are taken only when there is solid reason provided by the inbuilt currency indices.

Traditionally strategies for automated trading on MT4 are developed based on a specific pair. The limitations of MT4 and complexity involved in analyzing multiple currencies have been limiting strategy development to multiple time frames of pair being traded in addition to various filters and indicators in an attempt to create a strong and robust strategy - This has been missing the big picture of how the currencies are positioned in relation to each other. The importance of the strength and weakness of the currency pairs being traded has not been utilized much in automated trading. There have been numerous trading advisories and trading strategies suggesting trading based on currency strengths or trading the strong against weak, etc. but there has not been any proof or backtested data available to validate the trade setups or rules.

Phibase has built an platform on which we have developed MQL programs to enable us to test out various currency relationships, correlations and relative strength behaviours.

If you are new to Forex trading, you can find more information on Forex trading, brokers and strategy analysis methods at Forex InfoBook, ForexGermany and BabyPips.