Best Thread Correlation Trading - Basic Ideas and Strategies

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hey gang…

wow the Dow got big yesterday and so did the USD

whats that ? Dow up ,USD up ? no one said the world was perfect……

the US has what is called a perfect economic model at the moment…rising currency and rising Equities....but dont worry the wheels will fall off soon ;)

until then sell the yen into a rising Dow only and save the USD buys for when the Dow falls....

and if you like a punt do what a lot of traders are calling the perfect trade at the moment…sell yen into the USD off a rising Dow

and the CHF may also take some more pain now with the USD Flying ?......although the SNB will play catchup on some trades so CHF is still tooo interventional to call consistently...shame !

heres the 1hr yesterday on a 500ma setting FXcorrelator.....10/10 for any Yen bears (y)

Later…:smart:
N
 

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Hey guys in your opinion how much % of equity one should put on risk per trade in correlated markets.
for eg if i put 2% risk on GBP/USD(Long) and put another 2%EURO/USD(Long) then my overall risk is 4%.

Just to know what you guys think about it and what you guys do about it?
 
singhpavitra said:
Hey guys in your opinion how much % of equity one should put on risk per trade in correlated markets.
for eg if i put 2% risk on GBP/USD(Long) and put another 2%EURO/USD(Long) then my overall risk is 4%.

Just to know what you guys think about it and what you guys do about it?
Click to expand...

Good Question :smart:

since most of my plays are around the usd or Yen moves corerelated off the dow direction - to me the GBP and EUR trades will generally be in the same direction (as you probably know)

so if both GBP and EUR were indicating decent signals and diverging from the USD the logical solution is to risk 1% on each trade as they are strongly correlated and 2% is the max risk on this directional play

so think of it like a mini basket trade where I am confident of my yen and usd direction but taking a blended 50/50 bet on the GBP and EUR

Remember - The AUD (and even the NZD) will also be a decent candidates alongside the GBP and EUR as well...especially in the asian session !

N :smart:
 
look at the chart here....

http://www.trade2win.com/boards/for...-basic-ideas-strategies-1070.html#post1809658

the Dow was rising yesterday and the yellow YEN was falling....(ignore the crazy USD)

looking at the Blue euro and the Red GBP based on signals the only play was the GBP buy into the Yen as the Euro was flat / falling mostly

thats why seeing the signals first is important before deciding if a blend trade (2 pairs) is needed or just a straight G/Y buy like in this case

and yes the Orange AUD was also a brilliant buy yesterday into the Yen !

N
 
and if I was already 2% into that G/Y buy and the opportunity for a E/Y buy presented itself I have no issues as I am already in profit on the G/Y and will adjust accordingly

N
 
singhpavitra said:
Thanks NVP. But how about when market are not correlated. How many trades one can take at a time with 2% risk/trade?
Click to expand...

Good question

most simple Trading books tell you to trade no more than 1-2% risk per trade so that you can preserve Capital in times of Drawdown by reducing the $ per trade proportionally after a few bad trades in a row

the logical conclusion to this is that you only apply ONE trade at a time and do not multitrade as this puts a lot more than 2% of your capital on the line at any one time if things go wrong and suddenly you are 6-8 % down on 3-4 simultaneously entered (bad) trades

This will mean a much larger 1 off reduction to your Stake (2% of Capital) for the next trade, and it will also take longer to make the losses back than having lost 4 consecutive trades in a row - (where you had lowered your stake each time you lost.....think about it :smart:)

personally I may have 2 trades max on at any time and have 4% on the line which is risky.......normally though I am watching the position on the first trade and if I am already B/E or locked in then to me the next trade is already allowed at 2% as I have no risk exposed on Trade 1 and perhaps even another may be thrown in if things look good

we are all individual in this and its war out there.........show me someone regularly putting 10%+ of their capital out there all the time and I will show you someone who wont be trading ....... eventually :sneaky:

N
 
singhpavitra said:
Thanks NVP. But how about when market are not correlated. How many trades one can take at a time with 2% risk/trade?
Click to expand...

also google Trading Risk and money management .....theres thousands of articles on what to do..then find your own path

N
 
NVP,

Is the FXCorrelator.com site down or is it gone?

I was a paid client ... work duties took over so I haven't been on for a while.

FXJeff
 
Hi FXJ

Nope - my VIP Premium site is open and I publish and respond to any questions everyday from the VIP Crew

let me send you a personal link and get Sylvie on the case

N
 
Hey all

Our Hosting Platform Provider has been bought out by a larger organisation and they are trying to enforce much larger tariffs and also backcharge for the services provided back to 2008 (?)

we are naturally challenging these unauthorized changes to our contracted services and hope to have a satisfactory outcome soon

apologies but my FXCorrelator Websites may become non accessable as the Host tries to put pressure on us to agree to the new terms.....

We apologise for this but please understand it is out of our control

I will post more updates here if this happens regarding our future new home and any changes

Best wishes from Neil and Sylvie
 
Is it just me ........or is there anyone out there capable of providing contracted services that are reliable and stick to what was agreed in the first place ?.........jees !
 
If you just hosting a basic wordpress website or similar why not just go for an el cheapo shared hosting package from hostgator or similar. So cheap and no down time. Apologies if not appropriate I havent actually seen your site.

Good luck
 
toposwope said:
If you just hosting a basic wordpress website or similar why not just go for an el cheapo shared hosting package from hostgator or similar. So cheap and no down time. Apologies if not appropriate I havent actually seen your site.

Good luck
Click to expand...

thanks - i'll pass to Sylvie my IT brains ......

the stuff we have is pretty slick and has a lot of embedded videos and blog areas and other tricks so i think we had gone for more upgraded site qualities

will investigate though so thanks again

N
 
hey all

this is not a strengthmeter related youtube link....just some refreshingly simple and direct advice on Exits from the legend that is TRO

and yes.....it can be this simple.....you just have to trust yourself instead of the millions of complex Exit strategies out there ;)

EXIT PLAY BOOK - YouTube
 
hey all i'm out of action for a few days now ............

off to the Traders Expo in London tomorrow...........s/be fun :cool:

N
 
Hey all

had a blast at the Traders Expo..........and met a few nice people as well (you all know who you are)

a lot of "Expert" contacts for me as well .....thanks to everyone I saw there....these comments are my own opinion and I have no affiliation with anyone below (and certainly not as Ashraf is he is an Arsenal fan :p)

Steve Ward
About Us | High Performance Global Trading Psychology

Thanks mate .....an interesting seminar and I promise to apply the breathing techniques....and it was nice to hear that even the Best traders in the world (some of which you coach).... need coaching as well ;)

Ashraf Laidi
Ashraf Laidi : About Ashraf Laidi

no one sleeps at Ashraf's seminars....thankfully.....sparky and contentious ....and thanks for the chat on Saturday......totally buy into the correlation approaches...and I 100% agree with the gold Benchmark approach...still want to haggle more on your book price though...its 4 years old now ? ;)

Anna and David Coulling
anna coulling

Volume in FX ?...........thanks for the seminar guys...and the Very interesting chat afterwards.....genuine people and a genuine approach to helping others....and I will be certainly following up to try to understand some more.... and also perhaps contact Nigel Hawkes the Powerhouse behind some of the Proprietary systems now being used ........anyone who is using Forex Strengthmeters to assist trading Decisions will always get my attention - and I cant wait to investigate further :smart:

there were a lot of other great traders there but these were the main people I was able to spend a little valuable time with..........it certainly game me a boost to see generally I am on the right track at least some of the time :innocent:

and a message out to some of the people who were asking for help and advice ...I hope I was of help and you follow your own paths at your own speed...(and yes I always talk that much:cool: )

Cheers all and enjoy the rest of the weekend

Whats that Mr Corrie ?........of course I still love you dammit....jees ...hes a touchy little fella eh !" :LOL:

N
 
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