Best Thread Correlation Trading - Basic Ideas and Strategies

[mike.]

Neil, I had a watch of your youtube video's recently, i felt there was more to learn from the correlator than i was using. At the moment i use it to identify a trade-able pair, Once identified it has to meet certain criteria before i even think about trading it, a tick sheet if you will. This is my own strategy im working off, My question is, do you use the correlator in a similar way? or do you place trades directly from signals you have identified from the correlator? Would it be possible to put up a video of you making and explaining a live trade using the correlator ?

 

[NVP]

hey all

and please let me know if you see any vendors selling Strengthmeters to you ...........I would be happy to take a look under the bonnet to ensure you are not paying silly money for free products and offer alternative solutions ...........

cheers
N

hey all just to re-emphasise this above ...I took a stroll around e-bay and youtube yesterday and it seems the Forex Strengthmeter community is a lot more active than it was nearly 12 years ago (in the early 2000's) when I started.............

there was literally nothing then (well not in the Retail Arena - Jedster will confirm that Quants have been using this stuff for the Big Banks and Hedgefunds forever:smart

I built my own Indicator after investigating the cluster trading articles on the metatrader site and then talking to 2 Trader/programmers who had played with a few versions of it....but they both independently grew impatient and moved on to other things

bring any products you see to this thread and we will take a look for you .......I would hate for people to be paying thousands and thoudands of dollars for software that is pretty much available for free here at this thread and will do the same things as the Vendor Dashboards with a little customisation and tailoring.

its fair to say that the Jedster and I can look through most Vendor Strengthmeter stuff in minutes and tell you what they are doing ........in fact I've reviewed most stuff here over the years......for example...look back on this thread re Jason Fielder and see how his $3,997 offering became $997 and then he dissapeared from the scene with his Correlation Code ........he still took a lot of $$$'s off people who bought the hype though.....hmmm

as many of you are also aware as well the Indicator is the easy bit of the equation..........its how you use it that counts and I have still yet to see anyone that really gets it re these vendor systems ......or at least some half decent Stategies that merit the exorbatant fees charged .......

since 2004 on T2W - we are here for the long term and here to help ......cheers

N :smart:

 

[NVP]

Neil, I had a watch of your youtube video's recently, i felt there was more to learn from the correlator than i was using. At the moment i use it to identify a trade-able pair, Once identified it has to meet certain criteria before i even think about trading it, a tick sheet if you will. This is my own strategy im working off, My question is, do you use the correlator in a similar way? or do you place trades directly from signals you have identified from the correlator? Would it be possible to put up a video of you making and explaining a live trade using the correlator ?

Hey mike

I am painfully aware that I have not put more Videos and information out there on how to trade using Strengthmeters.......its more a time thing really as I juggle work and family life plus the Trading I try to fit in alongside it .....

Theres a lot of us out there in this situation and I do sympathise .....never enough hours in the day

as per ALL my videos on youtube I trade directly from the FXCorrleator indicators although they are different to the Free one I offer here .........but the principle is the same .I IGNORE what paircharts say as the pair pricing is irrelevent to me ........

YES ......that will shock some people but to me i'm interested in INDIVIDUAL CURRENCY Dynamics and not the pairings

in its simplest guise load the FXCorrelator below ...pick a suitable MA .............20ma is toooo slow for some so reduce the setting

then just Buy currencies that are diverging upwards/away from the Zero and sell currencies that are falling/Diverging away fom the Zero

I recommend you incorporate the yen or the USD as part of the pair

thats it ............super simple ..and if you want to trade say the 15m TF to scalp on this approach then also watch the 1hr and or perhaps the 4hr (same MA setting) to look for Currencies that are moving in the same direction as the 15m so you have at least 1 currency that is moving with the higher Trend

let us know here how its going wth some posts if possible

N :smart:

 

[NVP]

Hey all.........away from screens today so will update when I get time

N

 

[elisab]

The Nok is still the most correlated currency to the oil price in the last 3 months.

 

[Mrs M]

Thanks to Jedster and NVP for your feedback and comments. I'll definitely take a look at Joe Ross. Out of interest, the method I'm looking at is called MRP Energy.

 

[mike.]

.....its more a time thing really as I juggle work and family life plus the Trading I try to fit in alongside it .....

Ok, no problem, look forward to when you do get chance to pop a video up, keep us informed on this thread

......20ma is toooo slow for some so reduce the setting

Ok, setting reduced to 10-1, should it be set on a delta 3 ? and what is a delta 3

then just Buy currencies that are diverging upwards/away from the Zero and sell currencies that are falling/Diverging away from the Zero.

let us know here how its going with some posts if possible

Ok, maybe i am using its full potential by what you are saying, I have been getting some decent results, I just dont get time to trade at the moment, Im in the process of going DMA, as opposed to SB :-0, it may be a bold move but some of the pairs ive had signals to trade have had a 10+ pip spread, therefore not taken the trade because of the wide spread

 

[NVP]

Ok, no problem, look forward to when you do get chance to pop a video up, keep us informed on this thread





Ok, setting reduced to 10-1, should it be set on a delta 3 ? and what is a delta 3
try 10/1 ......dont mess with the delta .........it will slow and smooth your MA (its the 3ma of 10ma a little like a MACD)


Ok, maybe i am using its full potential by what you are saying, I have been getting some decent results, I just dont get time to trade at the moment (join the club), Im in the process of going DMA, as opposed to SB :-0, it may be a bold move but some of the pairs ive had signals to trade have had a 10+ pip spread, therefore not taken the trade because of the wide spread

.......with those sreads you need to be trading higher TF's ........like the daily

N

 

[NVP]

hey all

heres the market so far this week.........with the dow strengthening we look to sell the USD and or Yen and they are not dissapointing us so far .....(top sells this week so far on right weekly 1ma)

see ?.........its not rocket science so dont pay thousands and thousands of pounds to people who are Experts until you try yourself ......if they were so great they wouldnt need to be selling stuff to you :smart:

the Jedster and I are here to help ........weve both been there and done it on Forex strengthmeters ....trust us .....me for over 10 years and the Jedster*** since the dawn of time

N

** some say he was hewn from the rock of time......some say he eats 6 eggs for breakfast......we just know him as ...the Jedster......

 

[Jedster2001]

hey all

** some say he was hewn from the rock of time......some say he eats 6 eggs for breakfast......we just know him as ...the Jedster......

 

[Jedster2001]

Im in the process of going DMA, as opposed to SB :-0, it may be a bold move but some of the pairs ive had signals to trade have had a 10+ pip spread, therefore not taken the trade because of the wide spread

and

.......with those sreads you need to be trading higher TF's ........like the daily

N

You should definitely look at changing your broker, but stick with spreadbetting. Seriously, unless your account has 6 zeros in it, or unless you making 100+ trades per day and targeting tiny (<2 pip) profits, in the UK you should be looking to spreadbet.

Ok, the spreads are a little wider than spot forex, or futures. But, the majority of major pairs will have a spread between 1 and 3 pips.

For example with my (current) broker I have the following spreads:
EU 1.5
AU 1.7
GU 2.0
UCAD 2.4
UCHF 1.9
UJ 1.7

These are very typical. In fact, I consider these high, but they are also permanently fixed. They don't fluctuate during periods of volatility or news, so I am happy to pay the higher spread. I could easily switch to several other brokers who would offer spreadbetting with lower spreads, albeit they would not be fixed.

If you don't have spreads like this then switch broker, but don't move to spot forex just for the spread, just yet...

J

 

[mike.]

Wise words, ill take another look at the spreads on the majors from my broker.

 

[Purple Brain]

For example with my (current) broker I have the following spreads:
EU 1.5
AU 1.7
GU 2.0
UCAD 2.4
UCHF 1.9
UJ 1.7

These are very typical. In fact, I consider these high, but they are also permanently fixed. They don't fluctuate during periods of volatility or news, so I am happy to pay the higher spread. I could easily switch to several other brokers who would offer spreadbetting with lower spreads, albeit they would not be fixed.

This is the first time I've ever considered using an SB. Your spreads are very close to those offered by my current broker (OANDA), with the exception of the usd pairs which are a few dps off. But what really got my attention was your statement that the spreads are fixed. Is that really correct? Even round NFP your spreads don't widen? Do you find it easy to get trades on/off during high volatility events or does the platform ever mysteriously freeze, slow down or drop the connection completely which is what I have heard is a common occurrence. Which broker do you use as I would seriously consider switching if this is the case.

 

[Jedster2001]

This is the first time I've ever considered using an SB. Your spreads are very close to those offered by my current broker (OANDA), with the exception of the usd pairs which are a few dps off. But what really got my attention was your statement that the spreads are fixed. Is that really correct? Even round NFP your spreads don't widen? Do you find it easy to get trades on/off during high volatility events or does the platform ever mysteriously freeze, slow down or drop the connection completely which is what I have heard is a common occurrence. Which broker do you use as I would seriously consider switching if this is the case.

Yes fixed. The only one that changes (to my knowledge) is the Dow which widens to 3 pips (fixed) outside US hours, but then goes back to 2 pips (fixed) during US trading. But that is fair enough, I accept that.

Good point about execution though. It doesn't freeze so to speak, although getting market orders in, or manually closing orders during highly volatile times (NFP as a good example) is hard. The problem being, with price bouncing around so quickly it moves past the maximum slippage, so yes in the past, I have encountered many re-quotes. However, now I rarely try to place market orders during high periods of volatility. I plan my trades in advance, so I would say 99% of my orders are accepted just fine. That said, pending orders go in just fine during high vol periods, so that is another approach.

This is with GKFX. www.gkfx.co.uk. Make sure you go to the .co.uk site as the .com site doesn't offer SB.

There are a couple of others aswell. I am sure if you hunt around you would find them.

J

 

[Purple Brain]

Thanks jedster. I'm frankly stunned that they can offer such tight spreads in all circumstances. With OANDA you have to be extremely wary. They hype their dynamic spreads as a bonus - but they don't spell out the bonus is for them. While I don't ever try and get in/out during high volatility times, I do have to watch OANDA widen the spreads to 30 pips even on the major crosses. It really is a free lunch for them and one I shouldn't really have to workaround.

If there is such a differential in spreads between brokers/SBs wouldn't there be some may to make risk free profits purely on their relative mispricings?

 

[Jedster2001]

Thanks jedster. I'm frankly stunned that they can offer such tight spreads in all circumstances. With OANDA you have to be extremely wary. They hype their dynamic spreads as a bonus - but they don't spell out the bonus is for them. While I don't ever try and get in/out during high volatility times, I do have to watch OANDA widen the spreads to 30 pips even on the major crosses. It really is a free lunch for them and one I shouldn't really have to workaround.

If there is such a differential in spreads between brokers/SBs wouldn't there be some may to make risk free profits purely on their relative mispricings?

Yes, there are ways to arb between brokers, however it is very difficult to do in practise in the retail world. You have to be very quick on the mark and, if execution time falters, then you potentially end up losing. In retail trading there are better ways to make money.

In the investment or professional world, it is completely different. Some traders specialise in it. If you have a 5 leg arb, and use 10M, even just 1 pip profit is worth while. Traders are always looking for arb opportunities though. They see it as their way to get back at the brokers. If you saw the profits that brokers make, you would understand why...

J

 

[Purple Brain]

GKFX - Not That Impressed to be honest

You are now chatting with Hongbin Gu (Sales)

Hongbin says:
Welcome to GKFX Live Help! How can I help you?

Patrick says:
I currently trade through OANDA, Their dynamic spreads are a little too dynamic for me around major news events. I understand GKFX offers fixed spreads at all times. Is that correct?

Hongbin says:
Our spreads are fixed, but it will be variable under big market movement.

Patrick says:
So they're not fixed then?

Hongbin says:
In normal circumstances it is fixed.

Patrick says:
I'm interested in when you consider they are not normal circumstances. When would that be - NFP for instance?

Hongbin says:
It will be variable in NFP.

Patrick says:
OK. What was the maximum spread on say eur/usd during NFP last Friday?

Hongbin says:
Our price was quoted directly from the bank. So I am not entirely sure. I would suggest apply for a demo account with us and play around to see how it turns out.

Patrick says:
I don't really have time to play around so is it possible you could you find out for me from someone who maintains the historical data of your bid & offer what the maximum spread on eur/usd was during NFP on Friday?

Hongbin says:
Hold on for one minute please.

Patrick says:
OK. Thank you.

Hongbin says:
I have just asked my colleagues at our trading desk, we cannot provide an exact number of maximum spread.

Hongbin says:
It all varies from circumstance to circumstance.

Patrick says:
You don't have any records?

Hongbin says:
This is the feedback from our trading desk sir.

Patrick says:
Hongbin, if you asked me to fix your roof and asked me how much it would cost and I said, it's variable, depends on the circumstances and I won't let you know until just before I hand you the bill - would you hire me?

{a few minutes pass}

Patrick says:
Hello? Hongbin - are you still there?

Hongbin says:
Yes. I am still here.

Patrick says:
You can't tell me what it was or what it's likely to be. That's crazy.

Hongbin says:
I am afraid we cannot provide more information regarding this.

Patrick says:
Fair enough. I'm going to pass the script of this conversation onto almost 300,000 members of the trade2win website so thay can come to their own conclusion on GKFX.

Patrick says:
You sure you don't want to find someone who can help?

Hongbin says:
I would suggest give us a call at nnnnnnnnnnnnn

Patrick says:
So you have the information I need if I call, but not on live chat?

Hongbin says:
That's our support team's number.

Hongbin says:
They will be able to assist you better regarding your enquiry.

Patrick says:
Hongbin, I'm not going to call anyone or spend any more time on this. You're Sales - if you can't impress me by giving me the basic info I require then it's a pretty poor show. Goodbye.

 

[Jedster2001]

That is really funny...

That guy clearly doesn't have a clue. Sounds like he was reading out of the T&C or something. hmmm, not a good advertisement...shows what happens when you employ monkeys...

Well, all I can say is, that in 3 years of trading with GKFX, I've never seen the spread widen due to volatility. It may have happened of course, but I've never seen it. I trust the fixed spreads implicitly...

J

 

[Purple Brain]

I'd get a demo account and have a look what happens during major news, but then again, I'm not convinced what I'd see on demo is what I'd be getting subjected to on a live account.

Thanks for suggesting I have a look at them, but as you say, Hongbin hasn't done them any favours this afternoon.

With OANDA, the marrow is big - but at least they tell you how big it is before they insert it.

 

[NVP]

thats an interesting conversation PB............and thanks to the Jedster for the broker advice ...............he does plumbing work and walks dogs as well if anyones interested ?

(sorry - in joke)
N