Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

Forex Diary 26th June 2020

hey all .....steady day for me on lower Timeframes

GBP came out from 6am opens bear ...and has stayed ever since ....solid consistent selling to -70 pips..
CAD has followed it but half the size

Yen has been the hammer Bull ......now USD and CHF have also joined the party to + 40s

thats it really ....solid selling of Cable all Day ....plus Ucad Buys

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Neil
NVP

 

[NVP]

Forex Diary 29th June 2020

not a bad day .....GBP got bear early london and held ok (-65 pips)

yen Bear as well so strange correlation

Euro massive bull play .....(+50 pips)

been on Selling GBPUSD and Strangely buying EURGBP ...thats a strange pair for me to scalp

but look at the charts ....i simply go where the trends are and then look for opportunities to get in off pullbacks

The main indicator on the chart is available here for a small donation to the NHS charity

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N

 

[NVP]

Forex Diary 1st July 2020

ok start to new months action

CAD and GBP been main buys so far .....GBP now to +25 pips from 6am
3 Horseman (CHF,YEN,USD) all selling .....to -20s

solid correlation and patterns .....im mainly cable trading and buying

N

 

[DallasSteve]

NVP

This is quite a thread. You've been running it for over 10 years. I've been interested in Forex correlation trading (I think) but never found a consistent pattern. I wonder if we're talking about the same thing. To me correlation is finding two Forex pairs like EUR/USD and GBP/USD that tend to move together and then trade them when they depart from that correlation thinking they will return. I think that is also called "statistical arbitrage". Is that what this thread is about?

If not, maybe you can clarify. If it is, then my observation is that trading two pairs, like EUR/USD and GBP/USD, is really the same as trading EUR/GBP. The USD pairs will generally have lower spreads, but you are paying two spreads instead of one. Anyway, it seems like the analysis would just be a technical study of EUR/GBP disguised as trying to arbitrage the 2 USD pairs.

Another study that has interested me is following the combined USD movement for all of the major USD pairs and trying to trade them together, but that hasn't worked either and just results in more combined spread and commission.

Steve

 

[NVP]

todays market so far is very light ....so im not really trading .....maybe later

 

[NVP]

Forex Week ending 3rd July 2020

last week was uninspiring but solid patterns....

GBP peaked at +120 pips in week by thursday
CAD also did well into Wednesday

Yen was the Sell to -130s
USD followed at half pace...no drama just solid selling
Euro and Chf copied USD

The solid call all week was the Yen Sell with some nice pullbacks
the Bull side saw 2-3 changes with Euro buys monday / Cad buys Tuesday and a rapid GBP Bull wednesday

The main indicator here is available for a NHS charity donation to this website

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Neil
NVP

 

[NVP]

NVP

This is quite a thread. You've been running it for over 10 years. I've been interested in Forex correlation trading (I think) but never found a consistent pattern. I wonder if we're talking about the same thing. To me correlation is finding two Forex pairs like EUR/USD and GBP/USD that tend to move together and then trade them when they depart from that correlation thinking they will return. I think that is also called "statistical arbitrage". Is that what this thread is about?

If not, maybe you can clarify. If it is, then my observation is that trading two pairs, like EUR/USD and GBP/USD, is really the same as trading EUR/GBP. The USD pairs will generally have lower spreads, but you are paying two spreads instead of one. Anyway, it seems like the analysis would just be a technical study of EUR/GBP disguised as trying to arbitrage the 2 USD pairs.

Another study that has interested me is following the combined USD movement for all of the major USD pairs and trying to trade them together, but that hasn't worked either and just results in more combined spread and commission.

Steve

Hi Steve ....

This is not the only place where i try to explain what i do .....but due to Moderator guidelines i can talk about that stuff here .....so maybe check out my profile for more info

my core strategy is simple ...

Identify / sell bear currencies
Identify / buy bull currencies
together in appropriate pairchart

any timeframe anywhere any time .......

theres a lot of detail and strategies underneath that ...but its that simple

ive been doing it for 20 years and only sharing here for the last 10 or so

in answer to your question above .....selling EURUSD and buying GBPUSD is the same as Selling EURGBP (aside from a little variations on relative price levels per pip etc)

so why would I trade the 2 currencies instead of just hitting the 1 simple one ?

there may be reasons but generally i would just hit the single trade as clearly in the scenario above USD will not be featuring that strongly as a Strong Bull or Bear PROBABLY .....

ask me anything ...happy to chat ...and why not take a look at my Free FXCorrelator available in links below
N

 

[NVP]

NVP

Another study that has interested me is following the combined USD movement for all of the major USD pairs and trying to trade them together, but that hasn't worked either and just results in more combined spread and commission.

Steve

can you elaborate on that one a little more Steve ...not sure i get it

N

 

[NVP]

Forex Diary 7th July 2020

nice action today .....

USD solid buys to + 35s so far (CHF as well)
Sell anything else ....ive been on GBP and Euro mainly

the action is easy to see on the indicator shown...its available for a small donation to the NHS covid Charity here

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N

 

[NVP]

Forex Diary 8th July 2020

mornings action has opened up really nicely...

GBP got short and kept selling ...to -35s so far
most other currencies bear / Neutral - CHF to +18

Cable my main sell ....i was aggressive from 2540s to 2510s

The Indicator shown is available here for a small donation to the Covid Charity
it has now been downloaded by many people in last few weeks I hope is proving as useful to them as it has to me for so many years

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N

 

[NVP]

Forex Diary week ending 10th July 2020

ok week

GBP got to +145 pips
CAD got to -125 pips

USD was solid Bear play

The indicator shown is available here for a small donation to the NHS Covid Charity
Give something back while you see the forex market more clearly
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N

 

[NVP]

Forex Diary 13th July 2020

ok morning ....GBP got bear to -50 pips
solid enough bull action from USD and others to justify pair trades to GBP

N

 

[NVP]

Forex Diary 14th July 2020

slowish day

GBP sold off to -60s eventually .....
Euro up to +50s

USD flat ...

hard to make money of usd is flat ....

mainly cable selling today earlier

N

 

[NVP]

Forex Diary 15th july 2020

Nice session....Cad has rampaged north to +80s
CHF the Alpha sell to -70s
Selling USD all day so far ...

Ucad the killer play then .....I was on Cable buys earlier

N

 

[NVP]

Forex Diary 17th July 2020

so many traders ask me the secret to trading Forex (or indeed any market)

its simple guys and gals .....win more than you lose

or to put it another way .....give very little away on losses on bad days and absolutely attack the market on good days - no retreat ...take every penny offered

thats it .....Brutal defence , awesome offence

today was a absolute peach unlike some earlier days this week ......buy going short GBP and Long CHF and or Euro the market just kept giving and giving ......then it stopped .....pack up and go home ....dont give anything back to mr Market

have a good weekend gang
N

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[NVP]

Forex Diary 21st July 2020

Great week on GBP so far ...to +120 pips
Yen the Alpha Sell to -80s
USD solid Sell

Yesterday was excellent buying Cable all afternoon

N

the indicator shown is available here for a small donation to the NHS covid Charity

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[NVP]

Forex Diary 24th July 2020

interesting week so far .....

USD and Yen went short to -140s/160s pips - good selling to Thursday
GBP and CAD both been to +100s

interesting to see if Yen retraces south now through remaining Friday sessions ...a strong dow opening would help that play later

This indicator is available for a Small Donation to the NHS Covid Charity here - make a difference to someone and gain a great Forex Tool....

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N

 

[NVP]

Forex Diary 27th July 2020

solid monday for me ....had to deviate a little from normal plans

Euro to +45 pips
CHF to -65 pips
USD FLAT
GBP Bullish
Yen Bullish

im rarely brave enough to trade EURCHF but was happy to Buy EURUSD at times and also USDCHF

Cable was a little too twitchy but I grabbed a few pips there as well as its my goto Pair most days

N

 

[Dentalfloss]

 

[Dentalfloss]