Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

Hi once again, hope you are all well, NVP deserves a lot of thanks for the info that he has helped me with...!!! :clap::clap::clap:

After a gruelling couple of days, I have worked out the Metatrader and installed the Correlator,,,,,,,,many,many thanks to N.

I have read through the many,many posts on the forum and have a rough idea of the point of it (I think) I am going to have a lie down after all this exertion, will be back soon to pick your knowledgable and smart brains, hope you don't mind...my thanks and gratitude in advance:smart:

Cheers, Steve

ask away steve ......

and dont worry if it took a long time to read it ..believe me its taken nearly 4 years to write it ....

N
N

 

[stephensteve]

Good Morning all and thanks once more to NVP for the downloads.

When you say that the x men are used for scalping...how do you enter such trades, ??

Now that I have an idea of the trading methods, I feel that I have a new lease of life...

Would I be right to sell the GB/jap..GB/US.??? I am Grateful for any advice, thanks, Steve

 

[NVP]

Good Morning all and thanks once more to NVP for the downloads.

When you say that the x men are used for scalping...how do you enter such trades, ??

Now that I have an idea of the trading methods, I feel that I have a new lease of life...

Would I be right to sell the GB/jap..GB/US.??? I am Grateful for any advice, thanks, Steve

hey Steve .....where are you based ............I lived in in Aus for 2 years in the
90's

N

 

[NVP]

Good Morning all and thanks once more to NVP for the downloads.

When you say that the x men are used for scalping...how do you enter such trades, ??

Now that I have an idea of the trading methods, I feel that I have a new lease of life...

Would I be right to sell the GB/jap..GB/US.??? I am Grateful for any advice, thanks, Steve

To me scalping is pretty much just a much faster version than more longer TF trading .............the spreads are the key to any profitablity at all and also you have no time to hesitate regarding deciding whats happening ........its fast and furious :smart:

so heres (one) of my approaches based on the default systems I use here

Load the X men indicator on a dow / US indices (as usual)
(or indeed the normal lines)
use the 20ma / Delta 1 setting
Hide the CAD,NZD,AUD,CHF
set on 5 Min TF

Entry is when the USD and YEN are on the same side of the Zero.....sell or buy the Currenc(ies) that are on the opposing side

Aim for 5-8 net pips max .....
Stop loss is automated 10 pips

If the dows direction supports the move great ....but dont worry to much about correlation.......

E/U normally offers the lowest spreads
E/J will be more costly for the round trip ...BUT I guarantee you will get more pippage on the moves
G/U is an option ...but GBP is a twitchy SOB....
G/J makes me sweat and is ususally a lot of risk for the spread paid and GBP's twitch

i'm off line at moment today so anyone throw this up here as a picture and i will comment

later
N:smart:

 

[NVP]

Hi,

I have a question about the zero line. I appreciate that the indicator is showing relative strengths and weaknesses of the currencies, and a cross between two currencies is perhaps a potential entry point.
A cross of 2 currencies is interesting only for those 2 currencies....it is not as important a position as what those 2 currencies are doing in relation to the ZERO line (which relects all G8 positions)


However where does the zero line fit in. Does a currency crossing above or below the zero line mean anything? The ZERO Line reflects the BASELINE for the particular MA set on the G8 currencies......anything above it is higher than the average for the G8.....anything below it is below the average for the G8

What about if a cross between 2 currencies takes place above (or below) the zero line, does that mean anything? .....take your time and watch the charts over and over again .......if a crossover occurs way above the Zero line would you really be trading both ?...surely you sould be looking for a currency BELOW the zero line to trade against the Crossover Currency now rising ?


(see above) Or, is it simply a point of reference, and allows one to measure the relative strengths and weaknesses, and a cross of that level itself, doesn't actually mean anything.....both types of crossover mean something but to me the Zero line crossover is king ..........

I ask because I often see you saying that you'll want both USD and JPY to be above the line, and then you'll go long against a currency below the line. So, just trying to work out what that level is actually telling us...its telling us you have 2 BIG currencies both getting stronger or weaker together.........this is a Zero sum game so somewhere in the G8 others will deffinitely be moving in the opposite direction and therefore tradable AGAINST the YEN and USD


Thanks

J

see above dude ....I am sorry that my FXcorrelator.com site is down as I had a lot of stuff there to answer this ...will rectify soon with a new site :smart:

N

 

[NVP]

Hi once again, hope you are all well, NVP deserves a lot of thanks for the info that he has helped me with...!!! :clap::clap::clap:

After a gruelling couple of days, I have worked out the Metatrader and installed the Correlator,,,,,,,,many,many thanks to N.

I have read through the many,many posts on the forum and have a rough idea of the point of it (I think) I am going to have a lie down after all this exertion, will be back soon to pick your knowledgable and smart brains, hope you don't mind...my thanks and gratitude in advance:smart:

Cheers, Steve

The point of it Steve ..........

if you commit time, effort and passion to TRULY understanding and observing Strengthmeters .....I promise you and all the viewers here - you will then see the Forex market in a new and much more complete way ......and I teach here just the TIP of the iceberg ....

most people give up after a few days weeks months as the patterns and signals and rules they are trying to impose dont work all the time ..........so they go and find the next system or listen to someone promising them riches with a new wonder indicator.......(weve all been there)......I am a stubborn SOB so I persevered for years..........mainly because no one was out there to teach me and I like experimenting and playing - but also realised that maybe (just maybe) it meant I was going somewhere relatively new and therefore it could prove valuable as a tool.......which it has

the matrix anomaly is a little cheesy and corny in comparison but I remember first playing with this stuff in the early 2000's and realising it was special

never looked back ....

N :smart:

 

[NVP]

also , theres a guy called Tom yeoman who started out in the early 2000's as well with some Excel based strengthmeters ....

hes still teaching under the name of accustrength and also forexgrail..........he uses Strengthmeters extensively (although we use mostly different approaches) and his videos and seminars are professional and useful if you want a more rounded picture of what Strengthmeters can do

I could replicate and resell his "bespoke" indicators tomorrow if I wanted as they are not that difficult to copy to the trained eye ......but I'm not that kind of person....and also I would also be doing a tremendous disservice to his committment to furthering the cause of Strengthmeters in the Forex Business as I also try to do

take a look if all you guys get the time ............hes worth it

N

 

[NVP]

heres the myriad of things I try to look at when trading my FXcorrelator

too much ?..........then take them one at a time and build slowly ........you need to become a master Trader and it cannot happen overnight ........

simplest ?

Partnership (Yen and USD running together)
Polarity (both above/below the Zero and trade whats on opposite side of Zero)

and alongside these I would plump for the Euro or GBP as pairings to the USD and Yen as they are active during the London morning Session ....

N

http://www.trade2win.com/boards/for...-basic-ideas-strategies-1322.html#post2048578

 

[stephensteve]

Many thanks for your time and knowledge, I shall read and read and get a better grip on things, it is a lot to take in but I shall persevere and work on as best I can. Hope I can learn heaps,

I am based in COFF'S HARBOUR, NSW,a really beautiful place,"beautiful one day, perfect the next..."

What were you doing in OZ in the 90's ???

thanks again, Steve

 

[NVP]

Many thanks for your time and knowledge, I shall read and read and get a better grip on things, it is a lot to take in but I shall persevere and work on as best I can. Hope I can learn heaps,

thanks again, Steve

good luck Steve.....we are here to help

N

 

[stephensteve]

NVP....What were you doing in OZ in the 90's,,,???

I am based in COFF'S HARBOUR, NSW,a really beautiful place,"beautiful one day, perfect the next..."

 

[Jedster2001]

Thanks for the answers.

So in simple terms, the zero line is market neutral and obviously the individual currencies are showing their strengths compared with the rest of the market.

Clearly the strongest "Signals" take place when two currencies diverge from the zero line. Attached is an obvious example from this week. At the beginning of the week the currencies were all bunched up around the zero line. Then Sterling weakened and Yen strengthened. Euro also strengthened around a similar time and AUD was already relatively strong.

So, looking at that situation there were potentially several possible trades
1) long EURGBP
2) short GBPAUD
3) short GBPJPY

As it transpires, the best trade would have been the yen trade which had the bigest movement - 350 pips in this example. Note that I actually took the GBPAUD trade because at that time, AUD was strongest. The second attachment shows the GBPAUD chart, and shows my 2 trades - I scaled into this one. First trade closed for about +150 and the 2nd for about +70. So actually a good trade. Shame I put my stop a real long way a way to be safe, so my actual lot size and overal profit was small, but still profit nonetheless

I think the GBPJPY trade would not really have been that tradable. It is obvious using hindsight when looking back at the chart, but there is no other real reason to have entered the trade at that time.

So, I guess this is leading up to another question. Are there any other cues that you use to help decide when to trade? Perhaps the answer is a simple no, and rather than trying to capture all this trade, you simply waits for currencies to diverge a certain amount, and it is that point at which we jump on board, to try to take a portion of the movement?

J

see above dude ....I am sorry that my FXcorrelator.com site is down as I had a lot of stuff there to answer this ...will rectify soon with a new site :smart:
[snip]

N

 

[NVP]

NVP....What were you doing in OZ in the 90's,,,???

I am based in COFF'S HARBOUR, NSW,a really beautiful place,"beautiful one day, perfect the next..."

I was a partner in an adventure business in Cairns .........RAP JUMPING

N

 

[NVP]

Thanks for the answers.

So in simple terms, the zero line is market neutral and obviously the individual currencies are showing their strengths compared with the rest of the market.

YEP


Clearly the strongest "Signals" take place when two currencies diverge from the zero line. Attached is an obvious example from this week. At the beginning of the week the currencies were all bunched up around the zero line. Then Sterling weakened and Yen strengthened. Euro also strengthened around a similar time and AUD was already relatively strong.

YEP

So, looking at that situation there were potentially several possible trades
1) long EURGBP
2) short GBPAUD
3) short GBPJPY

I dont trade 1 or 2 and 3 is generally a high risk volaile pair - so no again

As it transpires, the best trade would have been the yen trade which had the bigest movement - 350 pips in this example. Note that I actually took the GBPAUD trade because at that time, AUD was strongest. The second attachment shows the GBPAUD chart, and shows my 2 trades - I scaled into this one. First trade closed for about +150 and the 2nd for about +70. So actually a good trade. Shame I put my stop a real long way a way to be safe, so my actual lot size and overal profit was small, but still profit nonetheless

I think the GBPJPY trade would not really have been that tradable. It is obvious using hindsight when looking back at the chart, but there is no other real reason to have entered the trade at that time.

So, I guess this is leading up to another question. Are there any other cues that you use to help decide when to trade? Perhaps the answer is a simple no, and rather than trying to capture all this trade, you simply waits for currencies to diverge a certain amount, and it is that point at which we jump on board, to try to take a portion of the movement?

oh boy have you asked the 65,000 dollar question .......see the 7 p's slide I posted earlier ....thats my starting point to analyse the market and find clues .....and why all 3 of your pairings above are usually not for me ..

J

more later
N

 

[NVP]

hey all

i'm online now for a while - well my charts are ......

5min scalping .........see rules posted in last 2 days

and heres what the recent few hours or so would have yielded....nice couple of scalps on a rolling south E/U

later
N

Viewing screen share 926566041 | Screenleap

 

[NVP]

hey all
for everyone watching

we took 10 pips on A/U LIVE......

see you tomorrow .......turning it all off now
N

 

[stephensteve]

WOW....RAP JUMPING....Sounds great fun.....and in Cairns, a beautiful place...beautiful one day,perfect the next..(I think I may have said that about Coff's...!!!)

Hi to you all, I have a great time analyzing the set ups, nice posts of charts NVP, thanks

From my viewpoint, I can see the set up is good on the charts that you have posted,ie US and Jap are both in place, Dow is where it should--- you seem to keep going with the US trades (EUR/US or GB/US or AUD/US).

Do you not go with the Jap.??? even though it is in a higher/lower place..??

I have edited this to say that having looked again,there are some Jap trades, I would still like to ask if you prefer the $$$ ???? It seems more stable than the yen, is that why.??? thanks NVP

Would appreciate your advice, thanks, Steve

 

[stephensteve]

AFTER A FEW ATTEMPTS, I HAVE LOADED A SCREEN...WOW..!!!

THIS WAS DONE AT 12:45 am UK TIME,,,,,Middayish here in Oz.

I wonder what your views are on this screen, I have made notes for myself and would love an expert opinion,

Thanks, Steve

 

[jungles]

correlation trading made easy

 

[stephensteve]

here is same an hour or 2 later..

Am i right to call the Dollar sell and Aus Dollar Buy...??

Cheers, Steve