Best Thread Correlation Trading - Basic Ideas and Strategies

[Adamus]

Re: theres no fools like a gold fool......

trade Gold as a normal play - but remember that in its standard chart/trading format (Gold/$) you will only make money if USD and the Gold line Diverge in the direction you want ......which used to be the pretty standard formula for USD / Gold price correlation (Gold up / usd down and vice versa)....but as you can see in the H4 charts below the USD has been doing pretty well alongside the Gold price so this has not been the big buy play everyone thought it would be by now (bless them - all it needs is some more in depth correlation ideas /thoughts - and my simple Gold hybid)

So where was the big money play on Gold then NVP ? ....c'mn all check the charts below ......gold has been rising steadly so just make sure your purchase currency for it was a genuine dog/faller.....hmm Euro works for me

NVP, what gold instrument are you charting and trading?

It all looks fascinating but I keep forgetting what all your nicknames mean. Commdolls? Tag?

 

[NVP]

Re: theres no fools like a gold fool......

Hi Neil
I read somewhere recently that the Euro's been showing a better inverse relationship to Gold than the US dollar in the recent couple of years, so this would tend to confirm that. I'd have thought if the current € problems continue though, the old status quo might re-establish itself (no, not the band, anything but that!)

Hi mate

hmm - Market correlations are a huge subject as we all know.....just trying to isolate and talk about the G8 patterns / relationships is bad enough....

For me the answer is to break it up into 2 elements

1) Golds relationship to total G8 currency value(which can be monitored quite easily) - ie is gold cheap or expensive verses a G8 currency basket

2) USD's relationship to the other G7 currencies

if what you read is true then I would expect to see gold strengthening against the total G8 global basket and usd strengthening against Euro within the G8 basket...

This would create the effect that gold is more inversely related to Euro than USD

money is flowing to gold and USD and away from the euro

gold is a funny creature as its freely treated as an investment/asset class (like Stocks/bonds) but sometimes referred to as a currency as well.....

it can sometimes correlate positively with Stocks/ bonds /commodities etc etc ...and sometimes do the opposite !

just down to perspectives on global valuations by hedgefunds and individuals looking to balance portfolios :smart:

N

 

[NVP]

Re: theres no fools like a gold fool......

NVP, what gold instrument are you charting and trading?

It all looks fascinating but I keep forgetting what all your nicknames mean. Commdolls? Tag?

Hey Adamus

Tag is the tag team (USD and Yen) ...they walk the same path a lot of the time re strength and weakness to other G6 currencies

commdolls are the 3 commodity related currencies (NZD, CAD and AUD) to which it is claimed their prices are very connected to commodity prices given their GDP dependencies natural resources like gold, precious metals and crude oil

I group them in a lot of my hybrids and it kinda works but clearly its not just commodities that drive the value of a currency....theres a lot more factors involved that are more important ........so Aussie D currently rules the roost due to increasing economic performance and high interest rates for carry trades.........although people then assume a nice Gold (and other natural resource) prices helps to keep it on top spot

me - I work closely with/respect correlation - but also know it can all fall apart just as fast as it can come together at times :smart:

Regards
N

 

[NVP]

Re: theres no fools like a gold fool......

NVP, what gold instrument are you charting and trading?

It all looks fascinating but I keep forgetting what all your nicknames mean. Commdolls? Tag?

Hi adamus

I chart the gold instrument available in Metatrader.....My Broker is ODL that has quite a few non forex feeds that may not be offered from other MT4 brokerage houses

N

 

[Adamus]

Re: theres no fools like a gold fool......

commdolls are the 3 commodity related currencies (NZD, CAD and AUD) to which it is claimed their prices are very connected to commodity prices given their GDP dependencies natural resources like gold, precious metals and crude oil

Great moniker for them. It evokes images of the Formula One girls who hold the brollies on the starting grid :clap:

 

[NVP]

Re: theres no fools like a gold fool......

Great moniker for them. It evokes images of the Formula One girls who hold the brollies on the starting grid :clap:

dont start me off....i'm getting to old for those images

N

 

[NVP]

Hi all

apologies but a quick drop in then off again as work is stupid this week

I have no idea why (?) but finally the swissie got away from the euro earlier today ....they must be sick of the sight of the euro as to be honest their finances and economy do not deserve to be tarnished with the same brush.....shame they cant move to a better neighbourhood

later all....glad you all liked the gold indicator (if my pm's are anything to go by)
N

 

[NVP]

nice tag buy recently as well.....supported by market acivity

all these 3 charts are available for free here

the DJ30 and the Gold are just simple charts (assuming you have them in your broker feeds)...I use a line chart as it is easier on the eye for my purposes...the light blue is a ma20 others are 50 and 200mas

the other right chart is a FXcorrelator set on 20ma delta 1

shimples !
N

 

[NVP]

what the hell have the swiss done - declared war on Europe ?

 

[NVP]

ok ok read it now......the swiss suits finally stopped buying euro and selling their beloved CHF.....that will cost them in the long run

I must admit they did seem glued together recently eh !

http://www.trade2win.com/boards/for...g-basic-ideas-strategies-391.html#post1120282

N

 

[NVP]

easy scalp selling U/J .......:


cummon G8 ...give us something harder !

N

 

[GMP]

Let's hope it's a hung parliament today, which leads to another UK general election day soon. I hate all the political journalists going into overdrive but I love these huge moves in Sterling!

 

[GMP]

drinks are on anyone who made 400 pips on £¥ since 2.45 this afternoon!

 

[GMP]

EOD report http://www.trade2win.com/boards/trading-journals/91616-icc-forex-system-testing.html#post1120534

Skewed by this afternoon's madness, but if only my real account had the margin available on my demo account...! Still, it's a good day when you make some money AND the electioneering is over :clap:

 

[alan5616]

Hello
I represent the ECB and we are very interested in your kind offer. We are willing to offer Greek Treasury Bonds in payment. I assure you there are absolutely no problems in Greece whatsoever - the people are well-known for welcoming austere economic restrictions imposed upon them because rich people messed up the world's financial infrastructure.
- Socrates

I just seen a pig flying past my window

 

[alan5616]

drinks are on anyone who made 400 pips on £¥ since 2.45 this afternoon!

I don't remember seeing a move like this, on GJ, for many a month. This was what it was like every day, back in the latter part of 2008. Can we go back there again? Yes please!!

No, Gavin, unfortunately, I can't offer to buy a round today. If we get a return to high volatility then we'll all be opening the Dom Perignon. Things are hotting up so, it could be that time, again, to make hay while the sun shines. If you can't make hay, then pick and bale cotton

 

[NVP]

I don't remember seeing a move like this, on GJ, for many a month. This was what it was like every day, back in the latter part of 2008. Can we go back there again? Yes please!!

No, Gavin, unfortunately, I can't offer to buy a round today. If we get a return to high volatility then we'll all be opening the Dom Perignon. Things are hotting up so, it could be that time, again, to make hay while the sun shines. If you can't make hay, then pick and bale cotton

hey ....nothing wrong with cotton picking !

off to vote.....still not sure....Republicans of Democrats ?

until tomorrow (just had a good hour on the corrie documentation !)
N

 

[alan5616]

hey ....nothing wrong with cotton picking !

off to vote.....still not sure....Republicans of Democrats ?

until tomorrow (just had a good hour on the corrie documentation !)
N

Don't you go voting for them slavery abolitionists, boy. You hear me?

 

[NVP]

.....AND THE VOTES ARE IN.....WE HAVE A WINNER

spare me
N

 

[GMP]

I don't remember seeing a move like this, on GJ, for many a month. This was what it was like every day, back in the latter part of 2008. Can we go back there again? Yes please!!

Anyone trading yesterday evening? I happened to turn over to CNBC just as the Dow plummetted 900 points for no apparent reason. The "experts" were blaming it on a glitch or a cascade of computer orders, but I see the same thing happened across the forex markets too (GJ in freefall again) so I'm wondering where it originated. Did it go from stocks to forex or the other way round?
I'm with you Alan - it's beginning to smell alot like 2008!