Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

thats it ....everyday .....rain or shine ......sick or well.........vacation or not......

If you turn up then you are participating and showing yourself and others and the market you mean business and want to play and learn.....

if you dont turn up you cant play .......

so turn up !!

N

 

[NVP]

EuroYen just handed me my morning pips on a plate so off to work now ....later all

N

 

[NVP]

mornin all .......dow struggling now to see the 14700's......yet the Yen and USd were mainly south of the Border yesterday

some strange correlation Karma then ....which is normally created by Economic news skewing currency behaviour

N

 

[NVP]

heres a 1hr TF on the 500ma setting.....it shows granularity in the forex action this week

I See

a 300 point move on dow since monday .......coming under pressure now so stops will be twitchy today

a major run on GBP yesterday ...now momentum slowing

a major Resistance point on Yens Rally

GAMEPLAN

well those are the 3 main things to watch above

I will be watching those 2 currencies closely for clues and interestingly they are both hinging on anticipated moves south..........both or neither ?....time will tell

the Dow will help.....if Correlation flows then a Falling Dow will get me into selling GBP and if Dow rallies then I hope to see the Yen fall like a stone

Go gettem everyone ......and trade what you see !!!

later
N

 

[NVP]

and remember my rule to "Turn up" ......if you dont turn up you cant do anything !

 

[NVP]

hey all

well YEN flew ........it busted that resistance line to pieces

whether the dow Correlation supported it was another matter....

have a good weekend all ! :smart:
N

 

[FX Trading Partners]

Well,

I believe in keeping it simple (as much as possible anyhow).

Oil, then EUR/USD, then XAU follows...the correlation can be extremely tight, and has made me large amounts of profits over a considerable length of time. Food for thought.

 

[elisab]

UsdMxn and Vix: a positive correlation that has lasted for several months. If we bet on the explosion of the volatility, then we might sell Mxn.

 

[Jedster2001]

UsdMxn and Vix: a positive correlation that has lasted for several months. If we bet on the explosion of the volatility, then we might sell Mxn.

That is possible. However, I would also say that what you are seeing isn't really a correlation. The Mexican Peso is highly volatile. There are many currencies that are highly volatile, the South African Rand, the Indian Rupee, the Hungarian Forint. Many many minor currencies have massive fluctuations. The Swedish Krona will regularly move 700 or so pips in one direction and then within a couple of hours reverse the move entirely! That is 1400ish pips of movement in one day. Regularly!

Try the SA Rand against the USD. Woh... It is often 2000 pips in one day. My broker gives me a spread of 80 pips on the USDZAR!!! And that is nothing compared to how much it moves.

These are not really correlations with the vix. They are simply highly volatile currencies, it is not quite the same thing. Going out on a limb here as I obviously haven't checked, but pull up a vix chart and overly any of these currencies and I am not sure you will see a correlation. You might see that as the vix increases, vol also increases in a particular currency. But that is what the vix is measuring - S&P volatility, which is a gauge of general market vol.

Just my midnight thoughts...

J

 

[Itshamish]

That is possible. However, I would also say that what you are seeing isn't really a correlation. The Mexican Peso is highly volatile. There are many currencies that are highly volatile, the South African Rand, the Indian Rupee, the Hungarian Forint. Many many minor currencies have massive fluctuations. The Swedish Krona will regularly move 700 or so pips in one direction and then within a couple of hours reverse the move entirely! That is 1400ish pips of movement in one day. Regularly!

Try the SA Rand against the USD. Woh... It is often 2000 pips in one day. My broker gives me a spread of 80 pips on the USDZAR!!! And that is nothing compared to how much it moves.

These are not really correlations with the vix. They are simply highly volatile currencies, it is not quite the same thing. Going out on a limb here as I obviously haven't checked, but pull up a vix chart and overly any of these currencies and I am not sure you will see a correlation. You might see that as the vix increases, vol also increases in a particular currency. But that is what the vix is measuring - S&P volatility, which is a gauge of general market vol.

Just my midnight thoughts...

J

Agreed - I think what one might actually look for is a currency with a consistently higher than usual range in a daily time-frame. Nor necessarily the 'exotics' either. Have a look at GBPCAD?
Trade canny,
Hamish.

 

[elisab]

That is possible. However, I would also say that what you are seeing isn't really a correlation. The Mexican Peso is highly volatile. There are many currencies that are highly volatile, the South African Rand, the Indian Rupee, the Hungarian Forint. Many many minor currencies have massive fluctuations. The Swedish Krona will regularly move 700 or so pips in one direction and then within a couple of hours reverse the move entirely! That is 1400ish pips of movement in one day. Regularly!

Try the SA Rand against the USD. Woh... It is often 2000 pips in one day. My broker gives me a spread of 80 pips on the USDZAR!!! And that is nothing compared to how much it moves.

These are not really correlations with the vix. They are simply highly volatile currencies, it is not quite the same thing. Going out on a limb here as I obviously haven't checked, but pull up a vix chart and overly any of these currencies and I am not sure you will see a correlation. You might see that as the vix increases, vol also increases in a particular currency. But that is what the vix is measuring - S&P volatility, which is a gauge of general market vol.

Just my midnight thoughts...

J

The volatility of USDMXN is at its lowest in recent months, just like the Vix. The positive correlation exists and overlaying USDMXN and Vix we can notice the perfect synchronicity of the movement. USDZAR instead is no longer related to the Vix.

 

[Jedster2001]

The volatility of USDMXN is at its lowest in recent months, just like the Vix. The positive correlation exists and overlaying USDMXN and Vix we can notice the perfect synchronicity of the movement. USDZAR instead is no longer related to the Vix.

ok, this is an interesting comment and did intrigue me, so I thought I'd actually pull up a chart and have a look. Attached is a simple chart showing the USDMXN with the vix overlaid.

You'll have to excuse me if I disagree with you, I wouldn't call that a "perfect synchronicity".

But, if you think there is a correlation there and you are trading it, then well done to you..

Regards

J

 

[NVP]

mornin all......

USD is weak at the moment on the left hand 4hr chart (Setting 20/3)

the Yen is stong so we have a divorce situation on my favourite forex Tag team ....c'mon guys kiss and make up as would like to make some pips some time....

on the right 15m TF - watch the dow futures when it hits those marked S/R levels .....i want to see what is happening here ........

struggling to make decent pips before work calls.......a little recent action buying Euro and more recently squeesed a little out of the GBP as well ........

chump change ............but no-one ever said that Forex was an ATM machine .....well apart from scam system salemen ..:innocent:..hahahahaha

N:smart:

 

[NVP]

let me look through those recent comments and come back guys ..........I was out of action over the weekend scoring brownie points with the wife .....

I never realised there were so many types of conservatory furniture .......ZZZZZZZZZ

N

 

[NVP]

last 30 mins have been more like it ......especially on 5mins TF where I was scalping

heres the 15m below that has also shown the decent action

late for work ....catch people later
N

 

[elisab]

What a correlation!!

 

[Jedster2001]

What a correlation!!

Interesting screenshot. I don't know why our charts look so very different.
Like I said though, if you trade the USDMXN based off a correlation with vix, then well done, good for you...

J

 

[NVP]

hey all

I see that the Dow has breached north and we have the NZD on top presently ....

N

 

[NVP]

gotta say this has been a very very nice monday

dow pushing 14,800 and the USD getting buried still with Yen now starting to fall a little as well

Nice !
N

 

[NVP]

all this USD doom is helping XAUUSD finally get a little better ..........heres the last few days on gold where you can trade it 2 ways

1) trade when (violet) gold was above the Zero and USD (green) below the Zero
2) or the even more conservative signal when gold got above ALL the other lines to show total
strength against all currencies

so a few moves .......
N