Hi NVP/Ingot
Sorry about my user name, its an old "tag" I had dating back to my times in the '90s trading in the good old (now bust?) US of A - I did abbreviate it to just Jrp but forgot the password and naffed up the whole get new thingy whatsit process. Sign of age I guess....
Quicky background. I came back into the trading arena about a year ago after a good break and instead of trading my old forte of futures decided to go for fx instead. I got my own "idea" about correlation early on this year and after proving, via flushing quite a few dollars down the broker's toilet!, that it didnt work I sat back and sulked and after quaffing a few glasses of the red nectar one saturday night, noticed something that was pretty obvious - typical after event doooh moment.
Anyway long story short, what I did notice was the way within which G/U and E/U behaved against each other - a sort of natural thing of course as both are quoted against the U - and set about formulating a trading concept based on this, utilising a fairly small time frame to generate trade frequency and thus test out my theory.
Trying this simple idea out was interrupted by a three week break to Florida followed by slowly getting back into the thick of "it" again during August (usually a slowish month, regardless of financial instrument), so come September I was managing to get some decent time in on trying the idea in conjunction with normal trading activities and started to get kind of excited, then along came October and that Correlation Code mass marketing campaign....
You know the deal there with CC and what caught my attention was the fact that it (in one guise) uses E/U and G/U in H1 time frame to spot a sort of divergence and potential "gap" filling opportunity - bang on traget with what I was experimenting with except for the "gap" filling bit, as I hadnt thought of it as being called that.
Curious as all we traders are, I signed up for the early edition of CC's webinar and duly trundled along to watch the presentation alongside with about 5,250 other lemmings according to the live counter on my webinar CC screen and what did I see? Well, I saw the sea... Yes! they had a picture of a beach, the sea and the sunrise accompanied by the often repeated slogan of "...you cant predict the weather but you can be assured of the sun rising everyday; you cant predict the markets but you can be assured of correlation happening..." or something along those lines - I got bored by then so wasnt really taking that lot in!
Anyway the real meat of the webinar relevant to CC was the fact that eight "methods" were available but once one had been learnt then all the other variations were easily implemented. It seems there are four scalping methods and four swing methods, lots of big buck bonuses (how do they go about valuing these?) and other "great" incentives when you sign on the dotted line for circa $2.0k or $2.3k if taking the three month plan, either way a far chunk of spondoolies for something thats not all that new or innovative as far as I could see imho.
What did capture my attention was the brief way they showed CC working on the GU and EU pairs combined with H1 time frame and scalping. For me this was interesting as it sort of fitted into my own endeavours, apart from one or two of their SLs looking rather large for scalping versus TP targets but hey ho, each to their own I guess. Thinking about the webinar afterwards it struck me that CC isnt really correlation, its more divergence. Least thats my way of thinking after seeing CC in very brief working mode, making a trade and (of course!) winning.
Having trawled through your own and those of other contributors excellent posts in this thread the other night its easy to see that you all have done a lot of work in the correlation area which is facsinating to say the least. I think my own small beer stuff is more likely to be classified as divergence observations and probably you could include CC under that heading as well, although I havent seen their system because $2k or whatever is not something I'd entertain - hells teeth, thats over 400 bottles worth of the red nectar at today's G/U exchange rate!
If you want, I can delve into my simplistic thinking further for you with some charts etc but as said above its mainly on the divergence thinking rather than strict correlation - might even get shot by the CC crowd when showing these ideas!
Apologies for the ramble and slightly off topic part content, I've been trading cable whilst writing this on my other pc so continuity has been erractic - or is that yet another sign of age?
Trade well and regards,
Simon.
