Forex Probability Meter Indicator: A Combination of 13 Standard Indicators Across Seven Timeframes

Normal distribution and standard deviation functions in expert advisors (EA) and trading systems help forex traders assess the probability that prices may move a certain amount during a given period of time.

Forex Probability Meter Indicator

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So, for testing a forex-trading strategy by estimating the results from sample trades, the system developer must analyze at least 30 trades in order to reach statistically-reliable conclusions regarding the parameters being tested. Likewise, the results from a study of 500 trades are more reliable than those from an analysis of only 50 trades.

The Sharpe Ratio, or reward-to-variability ratio, is one of the most valuable probability tools for forex traders. As with the methods described above, it relies on applying the concepts of normal distribution and standard deviation. It gives traders a method to check the performance of a trading system by adjusting for risk.

Yet, by knowing how these basic probability tools work, forex traders can have a deeper understanding of how automated systems perform their functions, and thereby enhance the probability of winning trades.

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