Many thanks.
Best Thread Correlation Trading - Basic Ideas and Strategies
Many thanks.
no worries bud...
NVP
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NVP :smart:
NVP
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NVP
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Hey Gang
if you want to see the big moves today (as above)
Heres 2 versions of by simple strengthmeter ......symbols adjusted on each based on the platform you have - try them .....FXCM formats fit most platforms these days
YELLOW = JPY
LIME = USD
RED = GBP
BROWN = CAD
GREY = CHF
TURQUOISE = NZD
BLUE = Euro
ORANGE = AUD
ask me any questions - you know where I am :smart:
N
if you want to see the big moves today (as above)
Heres 2 versions of by simple strengthmeter ......symbols adjusted on each based on the platform you have - try them .....FXCM formats fit most platforms these days
YELLOW = JPY
LIME = USD
RED = GBP
BROWN = CAD
GREY = CHF
TURQUOISE = NZD
BLUE = Euro
ORANGE = AUD
ask me any questions - you know where I am :smart:
N
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NVP
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hey all
Well we are more than 6 weeks into the year and what is going on ?
The Dow is driving North.....is there no end in sight to that train ?
and using my FXcorrelator on a 1,000ma setting
http://www.trade2win.com/boards/for...-basic-ideas-strategies-1065.html#post1787370
the Yen(Yellow) and USD (green) are being driven south by carry trades........although the Greenback has had more limited falls due to other factors making it more favoured at times
the Grey Swissie (right chart) is FLAT...... boo hoo......look what those nasty swiss bankers have done to my lovely Swissie.....total manipulation now and no fun at all as we cant use it in Carry plays anymore
Steady buy action from AUD (orange) and NZD (light blue) - no surprises there off of carry trades - but not a riot due to more sombre Local economics
CAD (Brown) - slight Falls from catching the USD cold
Euro and GBP ..........Early falls now recovered..Jees the euro is defying Gravity !
since mid Jan my 80/20 system on higher TF's has been pretty much in "permasell" on the USD and Yen so I hope my gang have been making dinaros
Thats all :smart:
N
Well we are more than 6 weeks into the year and what is going on ?
The Dow is driving North.....is there no end in sight to that train ?
and using my FXcorrelator on a 1,000ma setting
http://www.trade2win.com/boards/for...-basic-ideas-strategies-1065.html#post1787370
the Yen(Yellow) and USD (green) are being driven south by carry trades........although the Greenback has had more limited falls due to other factors making it more favoured at times
the Grey Swissie (right chart) is FLAT......
boo hoo......look what those nasty swiss bankers have done to my lovely Swissie.....total manipulation now and no fun at all as we cant use it in Carry plays anymore Steady buy action from AUD (orange) and NZD (light blue) - no surprises there off of carry trades - but not a riot due to more sombre Local economics
CAD (Brown) - slight Falls from catching the USD cold
Euro and GBP ..........Early falls now recovered..Jees the euro is defying Gravity !
since mid Jan my 80/20 system on higher TF's has been pretty much in "permasell" on the USD and Yen so I hope my gang have been making dinaros
Thats all :smart:
N
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nice stuff you guys post here. May I add my 2 cents
Someone tried using the fxcorrelator together with overlayed charts?
From some testing this looks promising...
But this method can result in big drawdowns if the correlation takes some time to converge. So don't trade it blindly. Define entry and exit strategies and better predefine when it is time for you to abandon the trade.
This is not intended to be a stand alone tarding method but more some food for though! ;-)
Someone tried using the fxcorrelator together with overlayed charts?
From some testing this looks promising...
But this method can result in big drawdowns if the correlation takes some time to converge. So don't trade it blindly. Define entry and exit strategies and better predefine when it is time for you to abandon the trade.
This is not intended to be a stand alone tarding method but more some food for though! ;-)
NVP
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Hey M
interesting !
my main concern is the scaling here as you are really just trading Euro against the GBP and at the mercy of the 2 different USD pairing sliding price scales (?)
On the FXcorrelator that can be signalled by just isolating the red (GBP) and blue (EURO) Lines and setting the MA to the setting you want to see where they crossover :smart:
I dont trade GBP against the Euro.........all my trades are USD pairing based - selecting the most promising currency to trade in the opposite direction to where the USD is going .....
N
interesting !
my main concern is the scaling here as you are really just trading Euro against the GBP and at the mercy of the 2 different USD pairing sliding price scales (?)
On the FXcorrelator that can be signalled by just isolating the red (GBP) and blue (EURO) Lines and setting the MA to the setting you want to see where they crossover :smart:
I dont trade GBP against the Euro.........all my trades are USD pairing based - selecting the most promising currency to trade in the opposite direction to where the USD is going .....
N
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hey,
yes, you are absolutely right. If you buy E/U and short G/U you end up buying E/G.
But the point I am trying to make is that in general E/U and G/U are highly positive correlated instruments. So you wait till the correlation breaks down and pairs move in oposite directions and then you tade accordingly.
And yes, the scaling issue is something I am working on.
And another yes for the MA-Crossover. That's a good thing ;-)
( I also mailed you ;-) )
yes, you are absolutely right. If you buy E/U and short G/U you end up buying E/G.
But the point I am trying to make is that in general E/U and G/U are highly positive correlated instruments. So you wait till the correlation breaks down and pairs move in oposite directions and then you tade accordingly.
And yes, the scaling issue is something I am working on.
And another yes for the MA-Crossover. That's a good thing ;-)
( I also mailed you ;-) )
NVP
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hey,
yes, you are absolutely right. If you buy E/U and short G/U you end up buying E/G.
But the point I am trying to make is that in general E/U and G/U are highly positive correlated instruments. So you wait till the correlation breaks down and pairs move in oposite directions and then you tade accordingly.
And yes, the scaling issue is something I am working on.
And another yes for the MA-Crossover. That's a good thing ;-)
( I also mailed you ;-) )
Hey M
in responding to above ..they dont correlate enough for me to use it seriously as a strategy.........sure they will generally both break in opposite direction to the USD but again I dont tend to rely on it and looking for large divergences on the E/G pair can be a dangerous game
Good points though and respect
N
Thanks for your feedback and you got some valid points. I am not trying to convince you, just exchanging ideas and views
Here you can also see the corrleation table. 93% ~ on a weekly basis (watch out, at one point it broke down big time and that's when you need rules to exit), 86%~ and a daily basis. And you can see how the correlation varies on an intraday perspective and that is exactly what I think makes it attractive.
Maybe some food for thought ;-)
Here you can also see the corrleation table. 93% ~ on a weekly basis (watch out, at one point it broke down big time and that's when you need rules to exit), 86%~ and a daily basis. And you can see how the correlation varies on an intraday perspective and that is exactly what I think makes it attractive.
Maybe some food for thought ;-)
NVP
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hey M
think about what those stats really prove....to me they mean nothing and I am only interested in figures right at point of trade
anyway sent you some ideas that may help ....and may even be same as yuors already ...hope they help :smart:
good trading
N
think about what those stats really prove....to me they mean nothing and I am only interested in figures right at point of trade
anyway sent you some ideas that may help ....and may even be same as yuors already ...hope they help :smart:
good trading
N
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Thanks for your feedback and you got some valid points. I am not trying to convince you, just exchanging ideas and views
Here you can also see the corrleation table. 93% ~ on a weekly basis (watch out, at one point it broke down big time and that's when you need rules to exit), 86%~ and a daily basis. And you can see how the correlation varies on an intraday perspective and that is exactly what I think makes it attractive.
Maybe some food for thought ;-)
In my experience measuring the correlations among FX pairs provides no edge at all. It is a common misconception that the behavior of one FX pair will be useful in predicting the behavior in another pair.
Now, what is useful is/are correlations between FX pairs and various asset classes.
NVP
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Hi Guys
yep 100% agree.........I look for negative correlation of Equities to Yen and USD and then trade the other currencies against them accordingly
I have nothing really tangible or consistent to use to justify trading the GBP against the Euro apart from Economic news releases, fundamentals or perhaps indicators that show significant overbought/sold signals
so not an edge in sight for me :smart:
N
yep 100% agree.........I look for negative correlation of Equities to Yen and USD and then trade the other currencies against them accordingly
I have nothing really tangible or consistent to use to justify trading the GBP against the Euro apart from Economic news releases, fundamentals or perhaps indicators that show significant overbought/sold signals
so not an edge in sight for me :smart:
N
NVP
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hey all
take a 500ma FXcorrelator and slide it next to the mighty dow (US30)
heres the dailys..... and Dow futures hit 13,000...wow !
this year so far the play was "risk on"
buy dow - sell Green usd and Yellow Yen (although the usd has been a far tougher nut to crack than the Yen that was the easy sell)
classic buys in 2012 so far were the AUD(orange),NZD(light blue),the red GBP and surprisingly the blue Euro as well....(go figure !)
and with the US Economy doing well that usd buy into Yen has also been a nice nice play
whatever you do and however you view the markets - a Strengthmeter shows you clearly whats happening....which is why personally I 100% follow strengthmeter based Trading systems...why settle for something less ?
N
take a 500ma FXcorrelator and slide it next to the mighty dow (US30)
heres the dailys..... and Dow futures hit 13,000...wow !
this year so far the play was "risk on"
buy dow - sell Green usd and Yellow Yen (although the usd has been a far tougher nut to crack than the Yen that was the easy sell)
classic buys in 2012 so far were the AUD(orange),NZD(light blue),the red GBP and surprisingly the blue Euro as well....(go figure !)
and with the US Economy doing well that usd buy into Yen has also been a nice nice play
whatever you do and however you view the markets - a Strengthmeter shows you clearly whats happening....which is why personally I 100% follow strengthmeter based Trading systems...why settle for something less ?
N
