Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

this strategy is nothing more than the close to close difference of two instruments used as price input for a typical channel breakout. the top market dominates the signals and you automatically do the opposite direction trade with the lower instrument your trading.

it is always in the market long or short and it catches all the big moves while maintaining small losses on trades that don't work so well. because it is in the market all time it is free to trade without any money managment what-so-ever as i have found that is the most profitable way to trade it.

typical of any trend following method it loses more trades than it wins however the winners are substantial and more than cover the cost of the losses.

thank you for looking

hey m

thats interesting and I must confess I have done work myself on looking at trading the DOW/G8 correlations.....

since the general assumption is for ES to correlate positively with E/U I am impressed that you are making money here.......

how do you manage stop lossees ?

N

 

[NVP]

hey all

well I gotta scoot now as I have to do some chores before going to the airport

I will try to get online when I can but more difficult this week coming and I wont be posting charts

hopefully Jedster and others will pop in when they get the chance for a chat

remember to newbies - read the thread - plus I have some free ideas below in the signature area and some oldie videos on my youtube FXcorrelator channel........my websites are down currently but I will get that fixed sometime soon - I promise !

N

 

[mark brown]

hey m
how do you manage stop lossees ?
N

have a safe trip!

i try and use logic to flip trades rather than use conventional money management stops. i figure how can i make money if i am not in the market so i am usually always in the market long or short. i adapt my trade expectations according to the regime of the market. money management to me is making profits not conserving capital. when you conserve something then it typically means you think you will run out it? right? hope this help. mark

as i stated above...

because it is in the market all time it is free to trade without any money managment what-so-ever as i have found that is the most profitable way to trade it.

typical of any trend following method it loses more trades than it wins however the winners are substantial and more than cover the cost of the losses.

 

[Jedster2001]

Hi Mark,

Could I ask, what were the reasons that you went long/short at that green line? Looking at your composite indicator there doesn't appear to be anything obvious, but then I don't know what to look for. I was looking at the chart and trying to imagine "being" at that point in time, and what might be the reasons for going long eurusd and short e-mini.

Equally, what made you reverse the position at the purple line? Are you working from other information, or were the decisions made purely from the information in that chart?

Thanks

J

this strategy is nothing more than the close to close difference of two instruments used as price input for a typical channel breakout. the top market dominates the signals and you automatically do the opposite direction trade with the lower instrument your trading.

it is always in the market long or short and it catches all the big moves while maintaining small losses on trades that don't work so well. because it is in the market all time it is free to trade without any money managment what-so-ever as i have found that is the most profitable way to trade it.

typical of any trend following method it loses more trades than it wins however the winners are substantial and more than cover the cost of the losses.

thank you for looking

 

[mark brown]

Jedster,

Channel Breakout system - however I am using the difference of the two instruments as the price input rather than one instrument alone. -Mark

>> this strategy is nothing more than the close to close difference of two instruments used as price input for a typical channel breakout.

Hi Mark,

Could I ask, what were the reasons that you went long/short at that green line? Looking at your composite indicator there doesn't appear to be anything obvious, but then I don't know what to look for. I was looking at the chart and trying to imagine "being" at that point in time, and what might be the reasons for going long eurusd and short e-mini.

Equally, what made you reverse the position at the purple line? Are you working from other information, or were the decisions made purely from the information in that chart?

Thanks

J

 

[NVP]

have a safe trip!

i try and use logic to flip trades rather than use conventional money management stops. i figure how can i make money if i am not in the market so i am usually always in the market long or short. i adapt my trade expectations according to the regime of the market. money management to me is making profits not conserving capital. when you conserve something then it typically means you think you will run out it? right? hope this help. mark

as i stated above...

because it is in the market all time it is free to trade without any money managment what-so-ever as i have found that is the most profitable way to trade it.

typical of any trend following method it loses more trades than it wins however the winners are substantial and more than cover the cost of the losses.

hey M

whatever gets you through the night buddy

we dont preach (much ? ) here and we certainly appreciate traders contributing idea and thoughts that work for them ........

what the hell - most people think we (i) am crazy anyway with all these lines flying around the screen

Jedster is asking a few questions as well.........he may be able to help..... the guy is a legend but never ever blows his trumpet here at T2w re what his background is......

so I try to every now and again to embarrass him ....hahahaha

N

 

[NVP]

hey all

ok up at 4am us time this morning ...............best part of the day ?, night ? ......whatever !!!

later ..........the other guys are minding the madhouse so feel free to post away.....

have a nice day ...........Boston is hot and sticky.........

N

 

[Jedster2001]

Jedster,

Channel Breakout system - however I am using the difference of the two instruments as the price input rather than one instrument alone. -Mark

>> this strategy is nothing more than the close to close difference of two instruments used as price input for a typical channel breakout.

That sounds very interesting. I'll have to knock up an MT4 version so I can have a play on the charts...

Thanks

 

[Jedster2001]

hey M

so I try to every now and again to embarrass him ....hahahaha

N

er, um....thanks.... :whistling

 

[NVP]

your welcome ...........just buttering you up for more help on more of my dumnass ideas.....

hahahahaha
N

 

[mark brown]

That sounds very interesting. I'll have to knock up an MT4 version so I can have a play on the charts...
Thanks

Jedster,

there is a trick to it if your going to replicate it. because you never know if the difference of the data is going to cause an inversion or not. you have to normalize all the data of both sides of the channel as well as the center synthetic data also.

sent you some code pm, Mark

 

[elisab]

Bad news for raw materials: UsdTry anticipates a further decline of commodities.

 

[elisab]

The gold-EurUsd correlation is finished, while the WTI-EurUsd one is resisting… what do you think?

 

[NVP]

The gold-EurUsd correlation is finished, while the WTI-EurUsd one is resisting… what do you think?

was it ever started ?.........

N

 

[NVP]

hey all

will be back in blighty next week so will go back to the morning updates then.........meanwhile post any questions if you have them

busy schedule here in the ole US of A ......and badly missing my daily doses of trading and screentime

i'm not addicted though....honestly !!

N

 

[NVP]

Mornin all.............went to a baseball game last night......amazing !

Rumour has it there was a game going on somewhere in the stadium.....

hahaha
N

 

[NVP]

hey all..........

well last day in the USA for me for a while ...............looks like its been an interesting week in the markets watching the US financial channels this morning

Remember what we always say here on this thread ............forget the experts and the commentaries and the endless hours of Droning Droning reports and recommendations and insights .......ZZZZZZZz

TRADE WHAT YOU SEE........when you see it (and not before !)

that would have kept a lot of people out of gold and silver recently instead of blindly buying on the dips...........cos it always goes back up right ?............hmmmmmm

later all....and all bag some pips for me today
N

 

[NVP]

hey all

well a nice nice week for the USD as the Dow gave back gains ........

the USD took around 4% off of the Yen and AUD......

N

 

[NVP]

hey there

Do you remember the good old days when the Yen and USD (and CHF) all were risk on/off plays and moved together in harmony .........jees they were profitable times !

amazing what a few trillion in global QE can do ........sigh....:innocent:.

your own Trading has to evolve guys .......so experiment with the FXcorrelator and try to find new correlation patterns all the time......theres plenty out there.... :smart:

As I have been mentioning for a while now ...this 20ma DOW/USD/YEN Trio play is a lot less prevalent of late........if I was sticking to the 20ma I would have been going more for trades with just any 2 of the 3 in aligment......with all 3 being a fleeting bonus ball.....

so this week would have then provided some trades instead of sitting on my hands trying to get the 3Dudes aligned ........or am I just being impatient and not trading the plan ?

have a good weekend ....i'm going to bed as the redeye back to london overnight did not provide the shuteye opportunity I hoped......

later
N

 

[NVP]

hey all

heres the year so far........

the trade of the year is buy Euro sell AUD..........although still only a net 9-10% in the bank from that move ......will it extend ?

looking forward ...(and I dont like predictions)....logic states that the USD should have a solid second half and the one to be in .....as I was foolishly telling some friends last night......(gulp)

N