Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

hey all

well thats the $64,000 question isnt it ?

Conflicting timeframe messages .......

jees this trading stuff is hard ....eh ?

and not as easy as all those nice system Vendors told me

N:smart:

 

[NVP]

Ive never said to trade and ignore Economic News

its an important part of the forex fabric.........

in the Larger TF's news comes and goes and will become a smaller part of the overall noise,trend, direction and general forex dynamics ..........in lower TF's its live or die stuff

so make yuor own decisions ....FF has a decent diary / Calendar page

N

 

[NVP]

heres a priceless moment in T2W .......

a lesson to every every trader and beginner that ever walks these and other forums

nothing may be what it seems
Trust no one
do your own due dilligence on everything
take responsibility for your Actions
walk your own trading path

jees ............I could be an axe murderer here luring you all into my web ?? :innocent:

seriously - well done the moderators again.........classic !!
N

http://www.trade2win.com/boards/t2w...a-trading-course-singapore-6.html#post2236532

 

[ForexCamping]

Hey, NVP such a great information shared by you regarding Correlation Trading. I will stay in touch for more information. Thanks..! As per my view correlation exists for a lots of complex reason.

 

[NVP]

Hey, NVP such a great information shared by you regarding Correlation Trading. I will stay in touch for more information. Thanks..! As per my view correlation exists for a lots of complex reason.

you are welcome .....very welcome

 

[NVP]

hey all

ask for the latest edition of Currency trader

www.currencytradermag.com

free to everyone - go get it !

I like Mr Fernandez ....he writes some interesting articles .......here he is in this months edition challenging the profitability on using multiple forex pair trade stategies.........

sure he does retreat a little towards the end of the article in fairness.......but in truth to conduct such an analysis just using the USD pairs is a little wierd to me ......eh ?

this to me is like questioning the aesthetics of Art ......but only by saying that one doesnt like landscapes .........and ignoring the rest (?)

Daniel ....youve missed the potential and possibilities of this style of trading by a mile ....sorry

N

 

[NVP]

heres the Daily and the 4Hr on a 20ma

heres 4 of the currencies batting on the same sides on both charts

we also have the USD and the NZD in action as well .....but why complicate things.....

if you see a currency on same side trade it.......preferably against a currency that is equally on the opposite side of the Zero as well ......

if in doubt always focus on the lowets timeframe signals/dynamics as they are the most critical to the trade in hand....

its not rocket science ............sure theres details

exact entry
exact exit
MM
choice of pairs

blah blah.....

but trust me this is detail ....the same as any trading system ....and you can experiment to perfect those ........just keep it consistent and DONT BREAK YOUR RULES

to build your own strategies in any market and using any systems / approaches you like..... you must start with some REAL REAL BASICS......things you believe in that fundamentally must lead to profit if they maintain signal

this is mine ..........buy currencies diverging up from Zeros . sell currencies diverging down from Zeros

and remember that 5 bar rule as well

N

 

[NVP]

morning

here we are ...........pretty neutral on those currencies mentioned yesterday as we see convergence on that right 4hr bar

that slowish convergence means momentum has slowed.......mainly those currencies havnt retraced that much so far

have a good day
N

 

[NVP]

wicked flick from Yen as it came back as a big big sell .........

anyone get it on lower TF's ?

have a good evening ......
N

 

[NVP]

Hey all :smart:

there are a lot of great Forex Traders out there using relative strength in their strategies.....quite a few sit at Forex Factory and help traders where and when they can...

I like Steve hopgoods work , Trader 101, Dreamliner , gg53 , FerruFx to mention a few........and also a guy called Hanover (so go look them up when you get time)

Personally I do find a lot of the published strengthmeters & systems these days far to complex and convoluted in their approach and output.......they lose the bigger picture and can confuse all but the most focused and expert Traders in this field .....thats not sour grapes because of my lack of programming prowness .....its just stating the obvious regarding core trading principles .....if you dont understand it....... dont trade it!

anyway - heres a recent comment from Hanover from one of his many big FF strengthmeter Threads .......do the words sound familiar to my responses to people here at my thread ?......

Trading Strengthmeters is a massive subject and each trader needs to find and walk their own path .......I and the guys above just try to be introducers, gatekeepers and guides where we can

have a good weekend
N

Dxxx,
There are a zillion different ways to calculate currency strength, just as there are a zillion indicators that you can use in your trading. You start with a blank canvas, and can build almost any strategy; the sheer number of possibilities can be daunting. For example, which do you think is the best moving average: simple, exponential, triangular, linear weighted, adaptive, sine, volume weighted, DEMA, zero-lag, Hull, Ehlers, Tillson, Jurik, Satchwell, .....? Next, how should you optimally set their parameters? And which timeframe should you best use them on?

As I understand it, it's not the indicators you use that are important; it comes down to how you interpret their plots, and how you integrate the various moving parts into your trading strategy: return, risk, setup, timing of entry, trade management, money management, .......

It took me almost 4 years to figure out how to trade profitably, in a way that I feel comfortable with (but then I expect a lot of folk are smarter than I am. ) In my view, anything that's worthwhile takes time and effort. When I first started out, I thought that the markets could be conquered by math, and that I would simply write an EA that would, over time, deliver profit. I assumed that by testing dozens on different indicators, I'd find those that mapped most neatly into the market cycles, and simply use them as signal generators: when to buy, when to sell, when to cover. Now, some 4 years later, I've come full circle, as my journey has taken me progressively down the path of discretionary trading, but I'm slowly reaching a point where I believe that I can nail some of my concepts down mathematically. Even though many of these are visual abstracts: support and resistance; chart and candle patterns.

Don't get me wrong, there are some contributors here who are strictly quant traders, but their knowledge of statistical math and econophysics is massively greater than mine.

If I ever get time, I might start a thread on how I've put the pieces together for myself. But there is not a lot of incentive to post on forums like these, as not all feedback is positive.

David

 

[NVP]

Any other people out there in the Strengthmeter cosmos ive missed ?

Jedster is our top gun here.......

c'mon theres plenty more...

N

 

[Jedster2001]

Hey all :smart:

there are a lot of great Forex Traders out there using relative strength in their strategies.....quite a few sit at Forex Factory and help traders where and when they can...

I like Steve hopgoods work , Trader 101, Dreamliner , gg53 , FerruFx to mention a few........and also a guy called Hanover (so go look them up when you get time)

Personally I do find a lot of the published strengthmeters & systems these days far to complex and convoluted in their approach and output.......they lose the bigger picture and can confuse all but the most focused and expert Traders in this field .....thats not sour grapes because of my lack of programming prowness .....its just stating the obvious regarding core trading principles .....if you dont understand it....... dont trade it!

anyway - heres a recent comment from Hanover from one of his many big FF strengthmeter Threads .......do the words sound familiar to my responses to people here at my thread ?......

Trading Strengthmeters is a massive subject and each trader needs to find and walk their own path .......I and the guys above just try to be introducers, gatekeepers and guides where we can

have a good weekend
N

Dxxx,
There are a zillion different ways to calculate currency strength, just as there are a zillion indicators that you can use in your trading. You start with a blank canvas, and can build almost any strategy; the sheer number of possibilities can be daunting. For example, which do you think is the best moving average: simple, exponential, triangular, linear weighted, adaptive, sine, volume weighted, DEMA, zero-lag, Hull, Ehlers, Tillson, Jurik, Satchwell, .....? Next, how should you optimally set their parameters? And which timeframe should you best use them on?

As I understand it, it's not the indicators you use that are important; it comes down to how you interpret their plots, and how you integrate the various moving parts into your trading strategy: return, risk, setup, timing of entry, trade management, money management, .......

It took me almost 4 years to figure out how to trade profitably, in a way that I feel comfortable with (but then I expect a lot of folk are smarter than I am. ) In my view, anything that's worthwhile takes time and effort. When I first started out, I thought that the markets could be conquered by math, and that I would simply write an EA that would, over time, deliver profit. I assumed that by testing dozens on different indicators, I'd find those that mapped most neatly into the market cycles, and simply use them as signal generators: when to buy, when to sell, when to cover. Now, some 4 years later, I've come full circle, as my journey has taken me progressively down the path of discretionary trading, but I'm slowly reaching a point where I believe that I can nail some of my concepts down mathematically. Even though many of these are visual abstracts: support and resistance; chart and candle patterns.

Don't get me wrong, there are some contributors here who are strictly quant traders, but their knowledge of statistical math and econophysics is massively greater than mine.

If I ever get time, I might start a thread on how I've put the pieces together for myself. But there is not a lot of incentive to post on forums like these, as not all feedback is positive.

David

That is a really great post that you dug out there.

Personally, I am very much in the middle stage of what looks like a very similar story - discretionary trading, albeit with a particular methodology. Strength meters however, very much form part of that basis of trading for me.

I think of my self as trading currencies, not currency pairs. Even though individual trades are obviously with specific currency pairs, I definitely think of that as the means to an end, for trading currencies. When I look at the AUDCHF chart (say), I don't think of it as an isolated entity, I think "ok, I'm selling the Aussie dollar, and I'm going to buy Swiss because the Swissie is strengthening at the moment".

NVP, Keep preaching... :smart:

 

[NVP]

morning all

i'm not a monday forex person if you follow this thread .....too early to call moves ...wake me up tomorrow

mind you the GBP is worth watching ........its woke up with a serious coffee fix !

Daily and 4hr 20ma's shown .........not a bad combo with the 4 hr TF 6x faster than the daily

N

 

[NVP]

That is a really great post that you dug out there.

Personally, I am very much in the middle stage of what looks like a very similar story - discretionary trading, albeit with a particular methodology. Strength meters however, very much form part of that basis of trading for me.

I think of my self as trading currencies, not currency pairs. Even though individual trades are obviously with specific currency pairs, I definitely think of that as the means to an end, for trading currencies. When I look at the AUDCHF chart (say), I don't think of it as an isolated entity, I think "ok, I'm selling the Aussie dollar, and I'm going to buy Swiss because the Swissie is strengthening at the moment".

NVP, Keep preaching... :smart:

Amen to that Jedster :smart:.......

for me Strenghmeters rule as we can watch and trade INDIVIDUAL CURRENCIES

The paircharts are just the tool to select the most appropriate pair we chose to trade .......sure perhaps a little more useful for Exits ....but thats it

N

 

[NVP]

mornin all

heres the daily left and the 4hr on right ....both on standard 20ma

get the free indicator below in the signature area

we are buying currencies above the Zero on both charts and selling currencies below the zero on both charts

thats it ?

yes ..........its not rocket science

N

 

[NVP]

too confusing ............?

are the charts too busy for people (yes they can be I know ) ?

ok try this

reduce the width of the charts to 1-2 bars .....like below

I call it the elevator view ....search for "elevator" in this long long thread of mine ...you will see a lot of posts discussing it

N

 

[NVP]

or go to just 1 chart

and follow the angle of the line......

heres using just the 4 hour to steer your lower TF trading

1) only buy currencies above the Zero
2) only sell currencies below the zero
3) only buy currencies with a diverging line going upwards
4) only sell currencies with a diverging line going downwards

so below at this moment you are only hunting/trading the GBP and the AUD

this is pretty simple gang..simple is good

N

 

[NVP]

looks like I was talking elevators from 2009 on here ...........

http://www.trade2win.com/boards/for...ing-basic-ideas-strategies-55.html#post991606

 

[NVP]

or even simpler just use the x men indicator .....its available here somewhere in the depths of time

 

[NVP]

also i was thinking last night about some work issues and a "P" word came to mind not on my chart below .....

PRIORITISE

hmmm more of that later .........without priorities we are all aimless and paralysed with multiple options ......

N