USDX (MetaTrader indicator) calculates a dollar index (USDX, DXY), using the USD/CAD, USD/JPY and USD/CHF currency pairs. This formula is used to calculate the dollar index:
USDX = 50.14348112x EURUSD-0.576x USDJPY0.136x GBPUSD-1.19x USDCAD0.091x USDSEK0.042x USDCHF0.036
The resulting indicator is similar to USDX, a dollar index that's traded on ICE. In 1973, the index was first introduced at a 100-value initial value. Only once were the rules for their calculation updated -- 1999 to reflect euro's introduction.
The indicator can be displayed as a line (MT4 or MT5 version), with two removable and configurable moving averages. This indicator can be used to complement any dollar-based currency pair's research and is displayed in a separate chart window.
The USDX indicator can be used in both MT4 or MT5 platforms. However, the MT5 version offers faster, more accurate, and more current index calculation. MetaTrader 5 users can see the entire candles while MetaTrader 4 users must choose which line to draw: Open, High or Low, and Close.
It is easy to modify the USDX indicator to display and calculate any currency index.
Input parameters used in both MT4 and MT5 versions of USDX:
- IndexPairs [default = "EURUSD. USDJPY. GBPUSD. USDCAD. USDSEK. USDCHF.] -- Names of currency pairs to be used in calculation.
- IndexCoefficients -- Currency pairs' coefficients to be used in calculation. It is important to order the coefficients; each coefficient corresponds with its currency pair.
- IndexInitialValue -- initial value for USDX calculation.
- MA_Period1 -- Period of the first moving average. To turn it off, set to 0
- MA_Period2 -- Period of the second moving average. To turn it off, set to 0
- MA_Mode1 -- Method of Calculating the First Moving Average: 0 -- MODE_EMA 1 -- MODE_SMMA 2 -- MODE_LWMA 3
- MA_Mode2 -- Method of calculating the second moving average.
Input parameters only for MT4 version of USDX:
- USDX_PriceType (default =PRICE_CLOSE). Type of price to display in USDX.
Input parameters only for MT5 version of USDX:
- MaxBars -- Maximum number of bars that the indicator can be calculated on. For unlimited bars calculation, set to 0.
- MA_PriceType1 -- Type of price to calculate first moving average.
- MA_PriceType2 -- Type of price to calculate second moving average.
- EventNumber - Number of events for MCSpy indicator. This parameter does not need to be modified if MCSpy is not used for any other indicators or expert advisors.
How to trade with USDX indicator
Although the USDX cannot provide trading signals, it can be used to compare with the chart of any dollar-based currency pair. You might consider buying when the USDX falls but the current currency pairs is rising. Or selling when the USDX rises and the currency pair falls. This would indicate that the currency pair is stronger than other components of dollar index.
This indicator also has the added advantage of using the USDX moving average to detect the current trend.
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How to download and install an indicator
In order to install the indicator on your MT4 or MT5 platform, you need to follow these steps:
- Click on the “Download Indicator” button located at the bottom of the screen.
- Save the file to your computer.
- Extract and move the files into the MT5>Indicator folder of the MetaTrader4 software file directory.
- Restart your Metatrader platform.
- Navigate to “Indicators.”
- And select the "USDX" indicator template to apply it on the chart.
Note: This indicator was developed by a third party. AtoZ Markets does not carry any copyrights over this trading tool.
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