Best Thread Correlation Trading - Basic Ideas and Strategies

NVP

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morning all ...

well im on cable again (hey go with the volatility)

GBP is a bear .......nice solid selling from early london

Cable scalping from 3060s to 3030s so far .......great start to day with a lot of pips in frame already

selling Euro and Cad as well into yen and usd ....but GBP is the alpha bear
 

NVP

Legendary member
36,611 1,859
Sorry been tied up with some training......

ok GBP and Euro have been the sells most of the day .......last 2 hours USD fell south as well so thats why you have been struggling on those pairs to sell them ....

i last sucessfully scalp sold Cable down into the 3020s.......a couple of scratch resells since got me out with a few pips loss....actualy offering again right now around 3044.......
 

NVP

Legendary member
36,611 1,859
morning all ...

ok gbp selling hard so far ...ive already scalped Cable south ....

went aggressive around the low 3120s .....trailing down steadily to 3090s so far

good solid start to day

CAD and NZD the Bulls so far .......but used USD against GBP as i do 95% of the time at moment

N
 

NVP

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36,611 1,859
resold Cable around 3110.......3103 now .....GBP bear train is slowing
 

NVP

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36,611 1,859
cable down to 3070 at times ........GBP is flattening ...not sure how much else is in the tank now london....
 

NVP

Legendary member
36,611 1,859
nice -----nvp --------- very simple if you know what to look for--------- hope you agree

Hey BP

all i do agree.....

in any timeframe all i do is look for the most volatile tradable currency pairs and patterns .........my background is in the higher TFs .......ideally Daily TF.....thats where everything i have ever shared here in this and my other forums and website blogs re Strengthmeters is most effective ........however a few years back I was working qith some very good scalpers and was persuaded to focus more on scalping again .....as I enjoy active live trading ...and daily tF trading is like watching paint dry .....

every day i now happily sacrifice a few percentage points on spreads and win rates etc to Trade live lower TFs ........

if i am on say the 1 mins ...........remember thats 1,440 times faster than the daily TF ...........thats a whole lot more trades in a year

I now have more time to trade and the volume of trades over time more than covers things .........easily

N
 
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NVP

Legendary member
36,611 1,859
Look guys .....

if you are becoming more experienced in trading you will have read that higher Timeframes generally are more reliable than Trading lower timeframes .........

I am not going to go into the detail here why that happens.....but generally .......I agree .....

However if you have good solid systems and strategies you can make lower Timeframes still pay......

lets look at the hypothetical math below

2 systems :-


System A pays out on average say a net 5% Return every 10 trades

System B pays out on average a net 2% every 10 trades


which is better in real terms if you have the time to trade system B ??


Answer

lets do the math - lets assume that both systems enjoy similar number of trade signals (per 1,000 bars)

in fact we dont even have to do that ...........all we do is devide one timeframe into the other and see where the returns are now


Assume System A is on the Daily TF

System A return = 5% on daily


system B - adjusted return to Daily returns

Baseline = 2%

4 hour (x6) = 12%

1hour (X24) = 48%

15min (X96) = 188%

5min (X288) = 576%


yes but thats assuming we are robots trading 24 hours a day ..........!!!

Can you see the theoretical returns here if you put the time in .........??

I will trade 96 times more often than the daily TF on the 15m timeframe ....as a 24/7 robot

even if you said above that you now only trade 8 hours a day live ......so take results all down by 2 / 3rds

but it still proves my point i hope ....

I take a decent 5% system on the Daily .....

I dilute it to just 2% for the lower TF action and slippage etc ......

I trade the 5 min TF for just 8 hours a day live

and i would still return 576% / 3 = 192% vs the same 5% on the daily for the same period .....

convinced ? .......

I have been for years .......and yes - of course I can do both at the same time !!!


have a good day

N
 

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