Best Thread Correlation Trading - Basic Ideas and Strategies

NVP

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the usdcad has been volatile today .......but the sweet spot is shown below...all other action was really where the USD and CAD were fundamentally positively correlated (same direction) so pips were being generated purely off of relative strengths in same direction (like 2 cars racing alongside each other....some differentials..... but not the sweet meat)

what I look for is major negative correlation ........(2 cars driving away from each other in opposite directions) that's where the bucks are

like from 10.30 today (y)

N
 

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NVP

Legendary member
37,786 2,110
the usdcad has been volatile today .......but the sweet spot is shown below...all other action was really where the USD and CAD were fundamentally positively correlated (same direction) so pips were being generated purely off of relative strengths in same direction (like 2 cars racing alongside each other....some differentials..... but not the sweet meat)

what I look for is major negative correlation ........(2 cars driving away from each other in opposite directions) that's where the bucks are

like from 10.30 today (y)

N

not that you cant see pips and profit in those NO zones re usdcad

but trust me ..........there will be better pair trades than this in those time periods !!

look at Selling AUDUSD below.........sure buying USDCAD makes pips (as usd was stronger than the same bull CAD move) but Selling AUDUSD will generate a lot more (and safer) profit (y)

pick your correlated times and your best pair partners to optimise profits :smart:

N
 

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NVP

Legendary member
37,786 2,110
norning all

ok things will be thinner now this week as the US enters its biggest holiday of the year and turkeys run for cover..............

usd has been weaker so far this week after early strength .......see below

N
 

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NVP

Legendary member
37,786 2,110
recent push north on USD index since 7.30am this morning .............could be ending soon and resumption of bear push

N
 

NVP

Legendary member
37,786 2,110
morning all

well the usd is still moving north slowly ...........heres the week .........

the gbp and cad have been sold off in last few hours or so been some nice opportunites there

I'm not really to fussed today as US are on bank holidays

N
 

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NVP

Legendary member
37,786 2,110
ironically that usd position above was at pretty much the high of the usd today ............been selling ever since ............I called the sells way back on F's thread ..........some nice moves today

N
 

NVP

Legendary member
37,786 2,110
usd still going north after 4 hours ...and new usd index highs in the week now hit

been some great sells on various currencies over the last few hours as they interchanged taking turns hammering the usd
 

NVP

Legendary member
37,786 2,110
good morning everyone

you have heard me talk at length about how I now use the usd index to monitor and time my USD pair scalping entries.........exits

on Forexperians thread as well I comment a lot about what the usd index is doing ........highs , lows , turning points etc etc ............I find it really helps my trading when I can call at least one of the partners in a usd pair trade !

the standard FXCorrelator indicator has been available here for free since 2009 .......its a solid little strengthmeter and you can watch the dynamics/performance of all 8 currencies (including USD) on any timeframe and any MA setting you desire......its the heart of most things I do in truth

however isolating the usd index in more real time (no MA skew) is I must admit very useful so I now offer it here for free so you can understand what the hell I am talking about sometimes !

this is not a unique or novel indicator.....theres plenty of USD indexes out there if you look..........you can latch it underneath usd pair charts to assist signals as well as also using it in isolation ....

anyway here it is ............the lighter Green lines are Hi / Lows of each bar to assist real price analysis and I'll alo drop it in the links area

cheers
NVP
 

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NVP

Legendary member
37,786 2,110
heres the UHilow in action last 2 days ............good strength from the USD means we attack the USDpairs with that in mind ....... heres EU getting the sell treatment !........other pairs will have fared even better if they were weaker than the Euro at times

play and experiment ...............its a nice little tool for assisting usd pair trading

N
 

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NVP

Legendary member
37,786 2,110
heres the year from the usd index ............the greenback is kicking but from mid year that's for sure ............EU actually was already under presssure in april (weaker Euro) ..but then really has taken the licks (with other usd pairs) as the US powerhouse kicked in Q3/Q4

note that you can use all price action techniques on the index ........support / resistance ......you can even load on MA's if you know your platform .remember loading a 20 ma onto this indicator replicates the usd's performance on a 20ma FXCorrelator .........!

later
N
 

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NVP

Legendary member
37,786 2,110
note that you can use all price action techniques on the index ........support / resistance ......

you can even load on MA's if you know your platform .remember loading a 20 ma onto this indicator replicates the usd's performance on a 20ma FXCorrelator ......see below ...!
 

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NVP

Legendary member
37,786 2,110
I've been trading Forex strengthmeters for over 14 years and happy to help !

see the links below for some insights and free indicators

:arrowr:The basic FXCorrelator indicator is attached below

:arrowr:What is a Forex Strengthmeter ? http://www.trade2win.com/boards/forex/179468-forex-strengthmeters-basics.html

:arrowr: The FXCorrelator - All my Indicators & simple systems
http://www.trade2win.com/boards/for...-basic-ideas-strategies-1489.html#post2197030

:arrowr:My Profile - http://www.trade2win.com/articles/1904-member-profile-nvp

:arrowr:The USD index - http://www.trade2win.com/boards/for...-basic-ideas-strategies-2272.html#post2443610

:arrowr:My Youtube channel https://www.youtube.com/FXCORRELATOR
 

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NVP

Legendary member
37,786 2,110
usd still going north after 4 hours ...and new usd index highs in the week now hit

been some great sells on various currencies over the last few hours as they interchanged taking turns hammering the usd

heres the 1 hr usd index ..........see what I meant re comment above ? (y)

also notice on the chart how the EU in the early part of the USD climb north was clearly NOT the best usd pair to be trading .........it was not falling initially !! (second chart)



N
 

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NVP

Legendary member
37,786 2,110
looking forward ..........it wouldn't surprise me if we see a little selling off of the USD .......especially as they've been on holiday and the morning coffee will need a day to kick in .......

or not ?

N
 

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