Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

13.48 hrs UK.....GBP going south

Hi all

Got time for lunchtime peek at the corrie (using a better version now than Post 2 that I'm not happy with and have asked for removal)

200/1 Settings on 1min, 5min and 1 hour

GBP looks like gradually starting to weaken (its now breached all 200ma's on 1m and 5m charts) so watch it against usual potential opposite Tag Team trade.....1 hour still says a strong "sell" for tag team but there may be some fast bucks here before GBP turns up again to align to 1 hr trend....

Neil

 

[NVP]

so how did it go NVP ?

Hi all

ok a few hours on here we are again........i'm not trying to sell this as a no lose system (nothing is no lose) .........just using these examples grabbed on the go to show how the indicator works vs standard charts

right the yellow verts were where I called the signals above
(well more hopeful punt really !)

so what happened ?

ok I called the trade a little early as the red GBP went back up on the 1 mins and was not assisted by Yen or USD (USD in my trade here) softening the move....since then however the GBP has generally obliged down on the 5 mins espec (1 min is more volatile) bounding down nicely........you would have needed a big stop (just above the 200ma) on the 5min to ride this but now would have been rewarded (I went for the the lower volatility GPB/USD combo here...GBP/Yen might have possibly killed you on that rebound)

hey dudes - this is not an exact science and we are learning as we go.........

N

 

[NVP]

signing off - Happy with this move now !

Hey all

just wanted to sign off for the day and conclude the 3rd post of the three today

the GBP "sale" just kept getting sweeter as day went on..........superb !

around 50-60 pips were stll on offer till around 17.00 on charts (which was 18.00 real time as my charts are 1 hour out !) good return after a shaky start....notice how the 5min (middle chart) was a solid falling Red line during the period but the 1 min chart (left side) was all over the place !.......hmmm lots to learn and observe :smart:

have good evenings
N

 

[NVP]

8th sep ...early action 7.38am uk time

morning all still BC (before coffee) but the market calls !!!

GBP has breached all 200MA's on 5 min (left chart) now
and looks like resumption of the tag team demise on the 1 hour

lets see what happens ...buy GBP sell tag team....

PM me for latest version of FXcorrelator - I was unhappy with originally posted in #2

(moderators - muchos gratias for your help !!!)

N

 

[NVP]

I love it when a plan comes together !!!

nice move..........and now :-

• 130+ pips up on trading (buy GBP sell USD)
• just around 50 pips up on buy GPB sell Yen (but see below)

Yen didnt deliver this time to help the GBP push + it gave a REALLY nasty whipsaw as well at start of trade that would have taken us out (doh !!)

The USD did kick back as well but did not fall back or breach to the GBPUSD 200MA - Remember usd is usually less volatile than the Yen so its a nice play to avoid the ole heart attack..but it normally does not deliver as much return.....

today is exeptional and gold hitting over the 1 thou (plus other indices pumping up) is really helping to send mr green though the floor in particular....now usually Yen gets real upset when the USD is "showboating" so watch it possibly go into powerdive mode to make up the gap !!.....hold onto your hats

still......i'm calling 3 from 3 now !

Genuine seekers of the truth go to my personal visitor message for how to
get the free indicator....

ok boys take it away............whos got the van keys ?

N

 

[NVP]

12.45 pm uk time....mind the Gap !

hmmm

bored wit hthe Tag Team vs GBP...........lets look at the Tag team
and their special relationship

they trend in same direction mostly (caveat caveat) but different volatility levels and speed over the indicator...........gut feel tells me this is currently a big gap this may tighten over next few hours

so calling it....... Buy USD Sell Yen if it breaches up the 92.30 level and starts to attack the 200ma line

N

 

[NVP]

13.42....hes crazy !!

Hi all,

sooo....1 hour on and I hope anyone watching (??) may have questioned
my bold trading call !

on reflection i to am wondering why the devil I called it (to late now NVP)

yes - there is a decent gap between the Tag Teams (retrace) BUT what other things must be happening to assist this reunion ?

The answer is (based on what we are learning) that the non tag team members probably need to all lunge upwards again. thereby moving our Tag partners downwards. thereby giving the Yen a chance to catch up with USD on the downward leg momentum.....

It is improbable my friends that the 2 will reunite if all the Antitag's (!) fall as this will send both Tags upwards and as we know Yen may then pull away from USD instead....!

.....lets see what happens....is this the end of rico ?
N

 

[NVP]

Notice anything else ?

another comment on previous Post ...........we have Global delineation here my friends
on the main 5min Corrie (left hand side of piccy) ps corrie is 200/1 setting on both charts

We are seeing :-

all 3 European Currencies above the Zero (ie all are registering values above the Global 200/1 MA average) and the rest are below the Zero........

so any ideas why ?........and can we use that information ?:idea:

jees....dont look at me ! :cheesy:

N

 

[NVP]

follow up on Last weeks activity......(see thead #116 )

ADVFN III World Daily Markets Bulletin
Daily world financial news Supplied by advfn.com

Tuesday 08 Sep 2009 14:55:41


The dollar had a down week in the week ended September 4th, with the greenback falling 0.63% against the yen over the week to 93.01 yen. Meanwhile, the dollar edged down slightly against the euro to $1.4303.

Currently, the dollar is trading at 92.24 yen and is valued at $1.4481 versus the euro. According to Commerzbank, the forex market will mostly track the equity markets this week, given the paucity of market moving economic reports. The firm estimates that the EUR-USD will trade in the $1.40-$1.45 range.

of course !!!!....we should have spotted that

N

 

[NVP]

Tom Yeomans

Hi Everyone......

I'm sure I mentioned this guy in an earlier Thread when we were all braindumping correlation info sources......I have no connection with this person but he does run systems that utilise currency correlations....so as far as I'm concerned he is much more experienced in these matters than I will possibly ever be and I am happy to recieve and digest any (free) E-mails received (!!)

(nope I have not bought it and probably will never as I am developing** my own strategies here on this thread and elsewhere).....** developing he calls it !!

Extract from e-mail received from Tom Yeomans

Keep leverage as low as possible.

It is nerve wracking to take a three hour position at huge leverages and sit there watching one thousandth of penny movements. The first rule of real money trading is to get the leverage down. If you haven't traded a demo at low leverage yet, as an experiment, try getting a variable leverage demo account and set it for 10 to 1. You will be able to withstand ten times the pain when trades don't automatically go in your direction. (percentage wise) Yet a pip is still worth the same amount. Since I often follow trends that develop over several hours between strong and weak currency pairs, I have found that it's much easier to go with the flow and give trades time to develop while I go about other tasks around the office. I keep the meter in view at all times but my platform and charts are usually down on the taskbar so I don't get jittery about my position.

Many currencies are different in their characteristics. For beginners, trading currencies against each other will take time to get used to. They have characteristics that are easily identified and they all react differently to news or economic events. Take your time and learn how to do this business. It will pay off handsomely.

Amen to that Tom....
N

 

[NVP]

Back to the Trade.....

Ha !! you think i'm, confused re the call on which way the USD vs Yen will move

look at it consolidating and bouncing off at the entry level I was suggesting to buy USD...

"HEY !" ....stop messing around guys and do something !!!

N

 

[NVP]

16.41 and all is quiet.........

perhaps i'm not cut out for this......

gee...trading Yen Dollar is as exciting as trading the Euro Swissie (no offence to any Aficionados of these trades)....

however perhaps they both make swell pairs to trade in ranges ?

Doh !.....Ivan (ingot54) mentioned liking euro Swissie in earlier threads.....ive lost my only friend...........

notice other things are starting to go on though... GBP (red) and Crude (Brown)
are falling.....Crude just went to bottom of the pack on the 5 min Chart

N

 

[NVP]

17.51.....zzzzzzzzz

no comment

N

 

[NVP]

20.24 pm Wrap up & Goodnight !

Hi all

ok heres the final Chart showing the moves since earlier today.....

i'll add to comments later if I get time but basically the USDJPY has been consolidating all day and each time it hit my suggested buy price it dropped back and ranged !

meanwhile other more standard trades (Sell GBP buy Tag team) may
have been passing us by.....(but more comment later on this)

so re lessons today kiddies :-


1) USD and Yen lines on corrie have converged a little on the 5min ....so why no Cigar ?

2) Can we create some rules regarding when to trade the USDJPY as a Range trade from lessons today ?

3) How can NVP persuade us that this is 4 from 4 !! :cheesy:


I will try to get back and edit these later for answers ....perhaps tomorrow as other things to do....(Doh!)

PS - if anyone wants a copy of the Corrie....I wont bite - PM me !

N

 

[NVP]

Country intertest rates vs FXCorrelator

Morning all............

I want to talk about comparing Currencies to country interest rates today but
tied up at the moment

This was in my FT.com E-mail this morning so convenient !

N

ps - phew !!! my wingman Ingot54 is still around despite my EuroSwissie insults yesterday.....best wishes to him and I know we'll see his valued input again here soon....the guy has a lot of class believe me !

 

[NVP]

GBP is drinking the fully leaded this morning

hmmm - just looked at 5min corrie 200/1 setting..........

can someone give GBP a valium please...i'm getting a headache !
N

 

[NVP]

Classic patterns on the currencies this morning !

had another peek (I am adicted to this !)

The FXCorrelator brings currencies to life

It isolates them on the screen so you can observe them each as 1 line and not by trying to interpret the results of the 7 currency Pairs that each Currency is trading against...(for the 8 majors I am concerned with)

use it strategically to assess the market regarding your own trading methodologies/timing or use it to trade directly........

this is a 200/1 setting on the Corrie 5min chart....look at the recent classic behaviour of GBP (red bold)............This is classic Trending behaviour....:smart:

hope you are all on it making money !

PM me for a copy when you want to play
N

 

[NVP]

14.08pm.......quick peek again !

Hi all

busy today so not getting many cheeky peeks.....(doh)

Euro (Blue) is the boy today.....its on fire........ :drunk:

If you want to know what currencies to be selling - go back to
thread 1 and start again, do not pass go, do not collect £200 !


N

 

[NVP]

14.50pm....Euro overbought ??

Hi

Ive discussed o/b and o/s before on the thread.....just eyeball the corrie on chosen Timeframe and Setting (by scrolling back through the Chart) and put your lines in where you want to be alerted to these potential situations

(yeah real scientific :whistling !)

heres the corrie above with my call on what the o/b position could be.....sooo a little more then (possibly) before we got excited about closing positions

N

 

[NVP]

Was it something they said ?

forget the Euro.....

USD and Yen have had one of the biggest arguments ive ever seen on the 5mins for along time

Guys Guys.....cant we talk about this and work it out ?

ok students of the Corrie.......what does this mean and how can we use
it to make some money ? ....or not as the markets are not trading
in normal realtionships here today...



N