Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

Hello everybody,
i'm new to this tool, my settings are 200/20 since i like smoother lines instead of faster with spikes, since i'm not a scalper but a daytrader/swing trader.

Anybody uses the same settings?
Another question, do you guys put some horizonatal level on the strenghtmeter, to show overbought/oversold zones?

thanks!

200ma / delta 20 ?

dude thats so smooth its horizontal ...........hahahahahahaha

personally I do (depends on ma settings) .........but as I mentioned in the exchanges with Sam (shakespeare515) I really dont get tooo nervous on excessive divergence and I dont trade retraces much

N:smart:

 

[NVP]

I Like the way you used the colors.. I'll follow your lead, I choose blue see comments below...

Sam
You see Eur/Usd at support.. ready for a move up.. Question: is it because of Eur strength? or USD weakness? Impossible to tell... So you look at Gbp/Usd.. It is also at a support level, looks like it could also be a good long trade.. now you have an idea that USD weakness is the main driver.. So what trade do you take?? My guess is that it would be wise to play the stronger currency (out of Eur and GBP) to trade agaiinst the weaker USD. The way to check that is to look at your connecting triad (in this case EUR/GBP) Does it show Eur poised for a bounce? or GBP? or is it flat? This will tell you a lot. If Eur/Gbp is at support (meaning ready for a move up) then Eur is strongest and trade would be Long Eur/Usd.

NVP
Not if you have all of the G8 on a screen …you can instantly see who is stronger/weaker compared to the whole G8……why hide important messages with just 3 currencies ?....and then it allows the opportunity to see if perhaps the aussie dollar is creaming all the 3 currencies under discussion ?...

Sam
You are not hiding anything, you are seeing everything. You can look at as many triads as you like.. I suggest starting with one until you are comfortable with it, then then it doesnty matter which triad you are looking at, they all behave similarly. As a trader gets more experience watching the markt this way, it is easy to add more triads..

So if you are using the most popular triad, Eur/Usd, Usd/Jpy, Eur/Jpy, You could add a new triad just by adding Aud/Usd, and Aud/Jpy (cuz you already have the Usd/Jpy open.. Now you have added 2 charts but a complete new triad. You can build triads a number of different ways.

NVP
But that’s about 5 charts now open isn’t it ? …..sam I don’t look at paircharts** …..so only need 1 chart on the screen to see all …………***(just to put on trade) …..


lets call it a draw we are both right in our own processes ?........hahaha :smart:

 

[NVP]

Sam
I have it a bit easier cuz I dont actually use traditional charts, I use multi timeframe dynamic fibonacci grids, so when i look at one currency pair grid, I am really looking at 4 diff timeframe charts onone grid. so when i stack a triad together, side by side, I am looking at 3 currency pairs but analyzing 12 charts and seeing multi timeframe suport and resistance. It makes it easier to see these correlations i admit, but they can be easily observed just by watching normal charts….

NVP
agreed .......we are diverging from the triad discussions a littel now so lets call this a day


been interesting

 

[dimdim]

hi NVP and all
i am new
i read few pages and find it very interesting but i dont speak very well the english and i think that till finish the reading perhaps forex dont exist
(i need for 5 pages 1 day so for 1486 pages 297 days) till then i dont know if my country greece is in europe or no (ha)
so
I would be very obliged if you tell me what pages can I get the information to

i allready download indis and read pdr+word and i saw videos ,but i see there are many details that i must study
thank you very much whether or not helping me because i know
sometimes is very boring to answer those same things again and again

 

[NVP]

Sam
lso, ur mention of quartets, septets, etc... that's not what i am talking about.. I am talking about concrete mathematical correlations………….
NVP
hmmm.....I believe that any of these combinations above deliver the same mathematical behavior as the triads within them ……its just adding more variables to the pot

sam
I would love to see those.. here is the Triad Formula based on Eur, Usd, Jpy:
(Eur/Usd) X (Usd/Jpy) = (Eur/Jpy)

NVP
Ok – let me load some specialized Triad/ quartet/quintet correlators onto this thread when I get time …..may be a little while on that one …..

 

[NVP]

hi NVP and all
i am new
i read few pages and find it very interesting but i dont speak very well the english and i think that till finish the reading perhaps forex dont exist
(i need for 5 pages 1 day so for 1486 pages 297 days) till then i dont know if my country greece is in europe or no (ha)
so
I would be very obliged if you tell me what pages can I get the information to

i allready download indis and read pdr+word and i saw videos ,but i see there are many details that i must study
thank you very much whether or not helping me because i know
sometimes is very boring to answer those same things again and again

hey DD

your greek will be better than mine so dont worry

the pdf you downloaded is the basic system

load up the indicator and play with it on the 20ma .......try to use the rules in the pdf to practice ........

and read the thread .......(sorry)

I am going to start a Forex Strengthmeter basics thread here at trade to win soon i think...it was pointless years ago (when I started) but now there are a lot more people interested in trading strengthmeters (an a lot of vendors selling overexpensive software) so I will start it

watch this space
N

 

[NVP]

hey jedster****

I may get onto some of the recent work discussed tomorrow after the dayjob...........

(jees hes a hard taskmaster !)

****some say he can recite the works of shakespeare backwards .........some say he is merkels Hairdresser ...we just know him as ..... THE JEDSTER

N

 

[dimdim]

NVP
Thanks for the lightning fast response. I WILL DO MY BEST

 

[shakespeare515]

Sam
You see Eur/Usd at support.. ready for a move up.. Question: is it because of Eur strength? or USD weakness? Impossible to tell... So you look at Gbp/Usd.. It is also at a support level, looks like it could also be a good long trade.. now you have an idea that USD weakness is the main driver.. So what trade do you take?? My guess is that it would be wise to play the stronger currency (out of Eur and GBP) to trade agaiinst the weaker USD. The way to check that is to look at your connecting triad (in this case EUR/GBP) Does it show Eur poised for a bounce? or GBP? or is it flat? This will tell you a lot. If Eur/Gbp is at support (meaning ready for a move up) then Eur is strongest and trade would be Long Eur/Usd.

NVP
Not if you have all of the G8 on a screen …you can instantly see who is stronger/weaker compared to the whole G8……why hide important messages with just 3 currencies ?....and then it allows the opportunity to see if perhaps the aussie dollar is creaming all the 3 currencies under discussion ?...

Sam
You are not hiding anything, you are seeing everything. You can look at as many triads as you like.. I suggest starting with one until you are comfortable with it, then then it doesnty matter which triad you are looking at, they all behave similarly. As a trader gets more experience watching the markt this way, it is easy to add more triads..

So if you are using the most popular triad, Eur/Usd, Usd/Jpy, Eur/Jpy, You could add a new triad just by adding Aud/Usd, and Aud/Jpy (cuz you already have the Usd/Jpy open.. Now you have added 2 charts but a complete new triad. You can build triads a number of different ways.

NVP
But that’s about 5 charts now open isn’t it ? …..sam I don’t look at paircharts** …..so only need 1 chart on the screen to see all …………***(just to put on trade) …..

yes it is 5 charts, 1 for each currency pair you are going to trade. you seem to be advocating a system that does not use charts at all.. 99.9 - 100% of traders look at charts. What I am saying is that no extra indicators are required to see and utilize this correlation while trading, just looking at price action is enough..

ok so just trying to understand your style.. ur saying you only have 1 chart open on your trading platform and you trade all currency pairs? so for example, if you have a Eur/Usd chart open, you make trading decisions on all other currencies??

So while looking at your Eur/Usd chart (plus your indicator, how many? 1 indy for each currency? or do you have 1 super indy that shows strength weakness for all currencies?) you see that Aud is strongest and jpy is weakest. How do you know exactly where to enter your Long position, since you are not looking at the Aud/Jpy chart? Do you still enter at support or resistance? How do you watch price action?

Or are you using purely strength meters for your entries? (I am guessing not, since that would normally not be a sound strategy). Ok for seeing strength and weakness but not ideal for pinpointing entries..

Sam

 

[LittleTrader93]

200ma / delta 20 ?

dude thats so smooth its horizontal ...........hahahahahahaha

personally I do (depends on ma settings) .........but as I mentioned in the exchanges with Sam (shakespeare515) I really dont get tooo nervous on excessive divergence and I dont trade retraces much

N:smart:

well if that's a valid settings i'll keep it NVP, since i've the opinion that kind of settings suit me better, anyway am i right saying that settings should be good for day trading and swing trading ?

I've the idea that once reaced a predefinied level (on FXCORRELATOR) on each TF a pullback / reversal should happen.

I've put on a M5 fxcorrelator chart 2 overbought level, -0.002 and -0.0025, still searching for the OS levels.
Any idea?

 

[NVP]

yes it is 5 charts, 1 for each currency pair you are going to trade. you seem to be advocating a system that does not use charts at all.. 99.9 - 100% of traders look at charts. What I am saying is that no extra indicators are required to see and utilize this correlation while trading, just looking at price action is enough..

ok so just trying to understand your style.. ur saying you only have 1 chart open on your trading platform and you trade all currency pairs? so for example, if you have a Eur/Usd chart open, you make trading decisions on all other currencies??
I have 1 chart open with a few Strengthmeter derivative indicators on it (well underneath it) .....thats it ....all G8 showing on the indicators and the pairchart itself is not even showing or important .....as I just need to hook the indicators to a feed pairchart ...........I only open up paircharts to enter and manage trades


So while looking at your Eur/Usd chart (plus your indicator, how many? 1 indy for each currency? or do you have 1 super indy that shows strength weakness for all currencies?) you see that Aud is strongest and jpy is weakest. How do you know exactly where to enter your Long position, since you are not looking at the Aud/Jpy chart? Do you still enter at support or resistance? How do you watch price action?...price action means nothing to me....aside from if I apply its rules to individual currencies

Or are you using purely strength meters for your entries? (I am guessing not, since that would normally not be a sound strategy) - dont be to sure about that ....the garbage in the market place would probably induce traders to believe it cant be done .......but thats nonsence if you research and work hard enough at your specialities in trading (like you have for your edge) anything is possible

. Ok for seeing strength and weakness but not ideal for pinpointing entries.....why ?.........I am looking at currencies individually in my systems ........the concept of pairchart price levels and all that goes with it is immaterial to me .......and would dilute the signals if I let it influence me to much

Sam

good questions .....

 

[NVP]

sorry gang ....gotta scoot .......dutys call

N

 

[NVP]

well if that's a valid settings i'll keep it NVP, since i've the opinion that kind of settings suit me better, anyway am i right saying that settings should be good for day trading and swing trading ?

I've the idea that once reaced a predefinied level (on FXCORRELATOR) on each TF a pullback / reversal should happen.

I've put on a M5 fxcorrelator chart 2 overbought level, -0.002 and -0.0025, still searching for the OS levels.
Any idea?

well the M5 is not the realm for longterm profitability ....but aside from that why not put a thread search ito my thread for overbought and oversold and even convergence ............Ive spent a lot of time and posts over the years on this stuff ...........its all in here dude ....you just have to spend some time

N

 

[NVP]

ok heres the daily/weekly action :-

left chart 20ma on the daily - convergence phase continues......Dow is dropping below prev support....conditions support buys on USD and/or YEN

right chart 1ma on a weekly.......the Yen leads the buy trail so far with EURO sells .....only about 100 (-/+) pips on the board as yet though for that pair (far right chart)

N

ok here we are .........

The convergence phase on the left chart has continued......is this the end ?
The Dow has also fallen back to the 20 sma level (coincidence?)

on the middle chart we see the emergence of just 1 main sell ....the NZD
and 2 lead buys being the Yellow Yen and the red GBP behind it

the Yen and now the NZD have put up the best show this week .........far right chart shows up to 200 pips move south.......will it resume ?


N:smart:

 

[NVP]

heres colin Twiggs report on USD index ..i like his daily updates .they are concise and fairly informed .....

meanwhile take an FXcorrelator and put the 4hr chart on a 500ma to see similar shapes / image for the USD (and any other currency for that matter) ......

jees the Greenback is under pressure eh ?

N

 

[shakespeare515]

good questions .....

very interesting approach.. the market can be traded in many ways. infinite number of strategies have been built on these markets. You seem to have found a great trading style that works for you. That is pretty cool of you to have this thread that you have been diligently updating for years it looks like.. What a great resource you are providing your readers. kudos.

Best regards,
Sam

 

[NVP]

very interesting approach.. the market can be traded in many ways. infinite number of strategies have been built on these markets. You seem to have found a great trading style that works for you. That is pretty cool of you to have this thread that you have been diligently updating for years it looks like.. What a great resource you are providing your readers. kudos.

Best regards,
Sam

Thanks Sam - appreciated

As you are probably aware from your own experience and background the "secret" in Trading is to find an edge that you trust 1000% that also fits your own personality and style...

and then Trade it .........with no qualms or doubts or hesitation....Trade it

the so called "secret" is in front of everyone who wants to be a sucessful Trader .....but 95% will never get there and achieve that goal

respect back :smart:
N

 

[NVP]

hey all

hmmm.......I had to come into work early for some meetings so I didnt get to my charts

perhaps later .......and I need to load something on that new Thread I have started here


http://www.trade2win.com/boards/forex/179468-forex-strengthmeters-basics.html

it will be stripped back to where it all started for me 10-11 years ago (the memory is faint.... !)

and I will go back to basics for the many Newbies who have contacted me over the years to understand from scratch how a strngthmeter works and how to build some simple strategies

this weekend
N

 

[elisab]

The purchase of Tbond is going on and the selling of emerging currencies too..this behavior is quite different respect to the one of May to September.

 

[NVP]

The purchase of Tbond is going on and the selling of emerging currencies too..this behavior is quite different respect to the one of May to September.

hmmm - so how are you trading it ?

N