Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

divergence forming on the ole U/J double act......but i'm not doing convergence calling tricks yet


no i'm not..........


I really mean it dammit ....leave me alone !!!


N

 

[NVP]

3am today and around 5.45am were (semi)-decent conergence calls on those 2.........now its not worth the effort unless either of them ahd been in the touchdown zone as well.......and thats nowhere near

to be honest I see really decent 98% probability convergence bets no more that 1 in every 1000-1500 bars max - so even on the 1 minute I will be getting max 1-2 a day

5 mins a couple a week

N

 

[NVP]

hey all ............nuts at work so i'll make it short and sweet

no recent trades..repeat no recent trades on the 5min system

ok read below if you were desperate for a trade fix !!! :smart:

rules are there to be broken......your money your decision

N

 

[NVP]

Long term view Time

what do you all think re best currencies to sell and buy during the current Middle easy crisis (that is spreading to China I think)

N

 

[NVP]

hey all

i'm calling a little divergence alert on the USDCAD and indeed the USDYEN on the 5mins TF

the 95% is still a little way off but this is deep deep territory

watch how much further they go and look for some pips on confirmed price action retraces

N

 

[NVP]

back again between meetings for 2 mins

hmm not bad - not bad

a B/E on the U/Cad still and the U/J has been kind in a little retracing

on my charts they are still registering as high overextended positions so the fun hasnt started yet really


later
N

 

[NVP]

second touchdown south on GBP in last few hours !!

 

[NVP]

jees that GBP is hurting...........no respite yet

 

[NVP]

hey all - still tied up with work tonight for a long time yet

the convergence plays delivered a few pips (See below) but I need to work on these in more detail over the next few weeks with a programmer I have on board .......and may be able to share more but its not rocket science really...

to be honest its pretty simple stuff - just hunting for overbought/oversold signals on the following highly correlated Currencies and trading them as Pairs - which clearly is possible using the paircharts and more standard indicators and forgetting the ole correlation rubbish and indicators I spout here

AUD/NZD - (hey not my fault on the spread - i'm just saying they correlate a high % of time )
EUR/CHF - (theres a surprise - but watch swiss bank intervention coming soon )
USD/CAD - (yes I confess I wasnt as up on this one as I should have been recently )
USD/JPY - (The tag team are tighter than a scotsmans purse clips)
EUR/GBP....(Beware - its a big diverger at times and will break your heart and bank in the process)

look for o/b or o/s positions on charts and trade on price action confirmation that they are retracing back to mean

yes there are subtleties I can (will) introduce regarding the actual dynamics of the G8 mix and the readings on the FXcorrelator at certain times (like a touchdown also being registered on the 5min charts re one of the currencies in the pairs above alongside big divergence) and even some market correlations - but thats icing on the cake to be honest......

dont overcomplicate it and just recognise that these guys are highly correlated a lot of the time and strike when they diverge way outside say 80%+ of their normal ranges on appropriate TF (like a BB on a 2.0 signal would identify with some supporting secondary indicators)

later all :smart:
N

 

[NVP]

hey Kruspe

In all honesty my main confusion (not critism but confusion) with the Dreamliner thread at FF is some of the pair combinations they are using - it looks completely arbitrary at times (based on the recent correlation calculations and overbought oversold signals on stoches) and I dont like it unless the dudes above are involved at triplets or Quadruples and I'm not a fan of Stoches as they become very twichy and de-sensitised at extreme levels which is actually what the system seeks to exploit......give me a corrie on a 500/1 setting anyday for comparing currency deviations (which is what I am now exploring with a programmer)

however all this could easily be my Strengthmeter based blinkers and and refusal to accept new ideas I do not understand yet.........so an open mind from me as i continue to watch the thread and chew over the system

However - the pips are really being hammered out at times and its a brilliant thread and best ive read in a long long time !!!!

also the brief intervention of the Tex dude from Basket 101 thread was interesting (no love loss there on the thread was there !!) and I do need to revisit that thread as he is claiming thousands of Pips a month are being delivered

oh well back to my day job...........

N

 

[NVP]

hey all

gotta go ....heres a parting message from our sponsors "uncle corries Southern tours"


hope you all enjoyed that GBP trip south .......easy easy money ......jees ..........
N

 

[Kruspe_Svk]

hey Kruspe

In all honesty my main confusion (not critism but confusion) with the Dreamliner thread at FF is some of the pair combinations they are using - it looks completely arbitrary at times (based on the recent correlation calculations and overbought oversold signals on stoches) and I dont like it unless the dudes above are involved at triplets or Quadruples and I'm not a fan of Stoches as they become very twichy and de-sensitised at extreme levels which is actually what the system seeks to exploit......give me a corrie on a 500/1 setting anyday for comparing currency deviations (which is what I am now exploring with a programmer)

however all this could easily be my Strengthmeter based blinkers and and refusal to accept new ideas I do not understand yet.........so an open mind from me as i continue to watch the thread and chew over the system

However - the pips are really being hammered out at times and its a brilliant thread and best ive read in a long long time !!!!

also the brief intervention of the Tex dude from Basket 101 thread was interesting (no love loss there on the thread was there !!) and I do need to revisit that thread as he is claiming thousands of Pips a month are being delivered

oh well back to my day job...........

N

Hi N,

yep, I agree... it´s great FF thread.

But I´m already a little bit lost of it...I wish I had more time to read all that stuff more carefully.

Also agree with opinion that Stoch is weakness of that strategy. I believe there is a strong potential in this kind of stretegies (I study another one which also deals with distortion of correlation between correlated pairs and recovery is expected) and your 500/1 corrie (or another one strength currency meters) could be a great way how to determine which currency is responsible for distortion of correlation.

jees, I have to improve my english

K

 

[NVP]

Hi N,

yep, I agree... it´s great FF thread.

But I´m already a little bit lost of it...I wish I had more time to read all that stuff more carefully.

Also agree with opinion that Stoch is weakness of that strategy. I believe there is a strong potential in this kind of stretegies (I study another one which also deals with distortion of correlation between correlated pairs and recovery is expected) and your 500/1 corrie (or another one strength currency meters) could be a great way how to determine which currency is responsible for distortion of correlation.

jees, I have to improve my english

K

hey K

please do share any public Forum strategies you like as they will be interesting :smart:

I have a project in mind to change the way we measure correlation between the G8 currencies away from those horrible pair % statistics thingies...............it will be the corriemeter

but I need another programmer folks............

N

 

[Kruspe_Svk]

hey K

please do share any public Forum strategies you like as they will be interesting :smart:

I have a project in mind to change the way we measure correlation between the G8 currencies away from those horrible pair % statistics thingies...............it will be the corriemeter

but I need another programmer folks............

N

I´d like to help with coding, but I absolutely don´t know it, it´s out of me

oK N, I will send you some stuff about that strategy (direct link would be out of sense, cause it´s in czech/slovak language.../ i suppose you don´t speak ?)...I will make for you some summary in a few next days..

and corriemeter ?.. uh, sounds great..I´ll keep on eye on it buddy :smart:

K

 

[NVP]

I´d like to help with coding, but I absolutely don´t know it, it´s out of me

oK N, I will send you some stuff about that strategy (direct link would be out of sense, cause it´s in czech/slovak language.../ i suppose you don´t speak ?)...I will make for you some summary in a few next days..

and corriemeter ?.. uh, sounds great..I´ll keep on eye on it buddy :smart:

K

hey k

a simple description of the system would be great .....no rush

many thks

N

 

[NVP]

Hi N,

yep, I agree... it´s great FF thread.

But I´m already a little bit lost of it...I wish I had more time to read all that stuff more carefully.

Also agree with opinion that Stoch is weakness of that strategy. I believe there is a strong potential in this kind of stretegies (I study another one which also deals with distortion of correlation between correlated pairs and recovery is expected) and your 500/1 corrie (or another one strength currency meters) could be a great way how to determine which currency is responsible for distortion of correlation.

jees, I have to improve my english

K

hey k / all

i'm nearly there on the FF correlation thread

just hit this excellent post and the dude is talking a serious corrie type approach now where he is discussing deviations betwen individual currencies (well nearly) and also a pragmatic R/R risk approach and also suggesting price action confirmation to enter......my kinda guy !

http://www.forexfactory.com/showpost.php?p=4393467&postcount=2630

in effect thats what I did on those last 2 convergence calls on this thread although not with the potential accuracy of data this dude is suggesting (but thats easily programmable and not just NVP eyeballing !)

1 thing they will not probably consider is the total G8 market skew factor at poin of signal...............which is in simplest terms is one of the currencies concerned in the touchdown zone and therefore ovebought/sold verses the total market...........but thats just our type of slants on the trade signal and my signature stuff

hmmmmmmmmm great post though - lets see if anyone agrees..........whatever I need to talk
to that dude !

( I still cant post there on FF.....teehee)

N

 

[NVP]

superb overnights...........

 

[NVP]

not bad recently if you ignore the Dow rises................

I am going to revisit a lot of my corrlelation ideas soon as the markets they are a changing

N

 

[NVP]

for me stepping back.............the tag is looking solid as a buy in the 15m 80/20 ma charts

so I'm waiting for Tag revisits north on the 5mins 80/20............and if the dow finally decides to fall later on it will assist this move so bring it on

convergence-wise one could day the GBP looks way out there as a potential retrace back north against everyone......but nothing significantly tells me hes coming back.......yet

N

 

[NVP]

hey all

heres another burst from the black swan boys

not exactly sure about the point of Vix verses inverted Aussie D but I've loaded a chart showing that AUD rules over the last year or so..........and they happen to have the highest yielding currency of the G8.........(Gosh).......

you gotta do better than that guys .........

whats that you say ?............the Middle east Crisis will inflate oil prices but by deffinition deflate other prices and prevent the European goverments from having to increase underlying interest rates.......

in other words the eurozone currencies are gonna get trashed by the markets for false promises ......hmmmmmmm

who cares ? ..............SEE IT, TRADE IT

later :smart:
N