Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

ok great morning so far

gbp is THE bear ...and usd is trending north ....no brainer for me to hit Cable sells

Remember I do not generally trade the 5min TF for scalping .....its far to slow for me

but I show it here to give an indicatoin of where ive been trading so far

N

 

[NVP]

is 2998 new high swing ? ...resell ?

 

[NVP]

took sell at 2995..

 

[NVP]

move to b/e so will not give any back

 

[NVP]

ok GBP struggling with sells now .....moving to other pairs ....back later

 

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its caught a bid
1.3000 rez area...from 1.2988
buyers could have some clout

 

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still king...but in rez

 

[NVP]

Thanks, NVP.
I think I may have overthought the PDF with your docs.
It says
1) ONLY Buy currencies above the Zero (ie these currencies are trending above the moving average set)
2) ONLY Sell currencies below the Zero (ie these currencies are trending below the moving average set)
I would recommend you initially only trade USD pairs and the trading partner to the USD is up to you.....this system provides an edge to give you the predictive direction of the USD !

Also, it says, when using GBPUSD as an example,
Here’s that GU 1 hour chart on a basic 20ma setting ….if we were using a very very simple approach to trading we would only look for trades when the green USD and the Red GBP lines are on opposite sides of the zero
Never trade them on the same side ….why ? …..because they are both bull or bear!

I think I just misinterpreted that as the most Bearish and the most Bullish would result in a more extreme move, than if one currency was just hovering around the zero line.
I may revisit this (again!) later in the week.

Looks like you had a useful morning. Good stuff.

hey trendie the PDF published is a broad outline of some raw principles .....so as shown below i would only contemplate trading cable if USD was on opposite side of zero to GBP (same for any currency)

This is Correlation 101 ....never trade 2 pairs of similar bull or bear direction

its just the tip of the iceberg .....and when scalping i kinda sometimes break this rule...but thats based on other ideas and strategies ive developed for scalping ......

this rule is still pretty good for traders using correlation as a bolt on for their own ideas

N

 

[NVP]

still king...but in rez

View attachment 274774

hey DF ...ive placed a fixed correlator on your timeframe / dates above on 4 Hr TF

the scales are a little different but the shape is there on USD - trust me

see the periods where green USD and Red GBP are running both Bull together ?

thats why i would not be touching Cable as a sell at moment on 4Hr ...its not that pips are possible ....they are ......but there are far better more pairs making more pips than this pair off the USD bull moves

N

 

[NVP]

hey all ...well earlier i was chasing UCAD buys as GBP got into the twighlight zone and i was unsure of its intentions

GBP rarely sits on sidelines for long and it came big time north ........so reveresed the london bias completely

This is GBP .....live with it or dont trade its pairs (many traders dont and sleep well at nights)

personally i embraced its volatility and madness years ago and Brexit made it worse .....a rollercoaster but much better for profits when you got it right !!!

inevitably i have chased Cable buys above 1.3004/5 ......its even obvious on the 5min chart below

Nice !

 

[NVP]

nice swing off the 3030 levels back ing obull on cable earlier ....stay hungry on bull

 

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[NVP]

ok us open ......lets see if we get more GBP push north

 

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[NVP]

Boring us session .....if anything the play is buying Euro into Yen or USD .....

Cables volatility is a shadow if its earlier self

 

[NVP]

View attachment 274798

2 minute TF is interesting DF..... its good to change up and down gear based on speed of market...I trade generally much faster than this in morning london session ....

tedious US session for cable ....tooo slooooooooooow