Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

kang gun

another correation and Basket trading legend


http://www.forexfactory.com/showthread.php?t=123284

 

[NVP]

http://www.forexfactory.com/showpost.php?p=2269178&postcount=61

 

[NVP]

sorry about the strange posts from me...all notes and links for my future reference

all the links will be worth looking at

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[NVP]

heres 5min overnights :smart:

 

[NVP]

Tell me you are all making money ...............

Euro arrived late to the party but has now delivered pips

 

[NVP]

last night I finished a mega session in the forums (ive attached here over last 2 days)
and will continue tonight......

meanwhile heres something that intregues me regarding the activity of Currencies during non core hours

eyeballing below I see the aussie twins are generally just as damn active during their "sleepy time" as awake........

thats not what we are told in all the forums.....so perhaps money REALLY never sleeps

N

 

[NVP]

Gbp and Euro are a little more correlated to active hours

nothing here really though that prompts me to include time based Criteria to any EA Basket Trading systems I Develop

I will keep investigating

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[NVP]

more interestingly for me I see that the E and G are probably more closely directionally correlated during non core hours than during core hours of buusiness activity

and I would take a guess and say that the NZD and the Aussie D are probably acting the same as well

this kinda makes sence to me ............anyone know why ?


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[NVP]

also any extreme currency movements during sleepy time to me indicates that big money players are being woken up to sanction trades that HAVE to be made to defend their positions in the market

or is that garbage ?

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[NVP]

more interestingly for me I see that the E and G are probably more closely directionally correlated during non core hours than during core hours of buusiness activity

and I would take a guess and say that the NZD and the Aussie D are probably acting the same as well

this kinda makes sence to me ............anyone know why ?


N

to me the only movements in a sleeping currency will be to do with being the partner in a pair where the other currency is reacting to news during its own active period

so for example if something affects the European markets during active hours I would anticipate that NZD and AUD will take the opposing positions equally if they are deemed to be traded as pairs to the european currencies concerned

unless at the time the NZD and AUD have differing attractivenesses due to lingering news recieved during their previous active periods...........

hmmmmmmmmm

N

 

[NVP]

we'll get onto the big dogs at some point USD and YEN

interestingly these guys never trade in any overlap active market periods...........

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[NVP]

talking about basket trades

the 5 min action this morning highlights what I was discussing at the weekend re tribes and potential groupings


I feel if you put me on the spot I would have

USD and Yen as a Team and then run CHF and CAD with them (as this chart below)

then id trade the other 4 currencies against them above as a basket of pairs

so the teams would be

Team1
AUD, NZD,GBP,EUR

Team2
USD,YEN,CAD,CHF

Cad is not life and death to me to be honest but makes up the 4some

Trade all pairs as Buy team 1 and sell team 2 on a simulated Account

when the total account value on the demo achieves a predetermined tipping point value (positive or negative) trade in the direction of the money

so if the positive value was hit buy Team 1 sell team 2 aiming for a predetermined target pips (positive) on your second (Seperate) account

and if the negative was hit on the Demo Sell Team 1 buy team 2 and aim for a predetermined target pips (positive) on your second (Seperate) account

you can actually do this based on extremes of the Demo account as well and trade anticipating a revesal of the divergence

hmmmmmmmm..........:smart:
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[NVP]

here they are

EURJPY
GBPUSD
AUDJPY
NZDUSD
GBPCHF
NZDCHF
EURCAD
AUDCAD

Buy them all in a demo account...if the result goes a net +ve value (TBA) buy the lot in a seperate account and target a set profit

if they demo goes a net -ve position(TBA) sell the lot in a seperate account and target a net profit

this testing works great on EA's so I need programmers to help me or I need to play with Free EA's on offer at FF and swap my currencies in question with whatever is being used there :smart:

N

 

[NVP]

here they are

EURJPY
GBPUSD
AUDJPY
NZDUSD
GBPCHF
NZDCHF
EURCAD
AUDCAD

Buy them all in a demo account...if the result goes a net +ve value (TBA) buy the lot in a seperate account and target a set profit

if they demo goes a net -ve position(TBA) sell the lot in a seperate account and target a net profit

this testing works great on EA's so I need programmers to help me or I need to play with Free EA's on offer at FF and swap my currencies in question with whatever is being used there :smart:

N

i'm a lazy b*gger so i cant be ar*sed to set up more demo accounts

so heres a chart that shows the rolling 1000ma balance of those 8 trades on my 5min charts
( 5mins are much to low a TF to cover the spreads NVP )

I will be placing a SELL trade when the line below falls below the Support level shown or above the Resistance level shown

Remember this line reflects the NET account value of the 8 trades Trade based on equal $$$ per trade placed (as near as Dammit)

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[NVP]

were in now

open all 8 pairs as sells if you have that capacity and bet same value/$/Lot per Trade

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[NVP]

we are in profit as line is below entry point

not sure what this means in pips though so will have to adjust the settigns this week

this is very interesting
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[NVP]

still ticking along and fascinating

clearly I can watch my 8 currencies and their relative strengths alongside this chart/priceline so I can interpret what is Going on

I went is seeing some strong Tag action north and some weak Europeans and I anticipated further consolidation of this position by seling the basket at the red line shown

at this moment

Yen and USD are looking ok north still
CAD is a strong North and CHF has just turned north on the 5mins as well
thats all 4 signals I need now going north .............yes !!

GBP is still south but fading a little

Euro has turned North BUT NZD has turned south now on 5mins to Counter the movement :clap:

AUD Is a real pain and a solid NORTH..........if it turns soon we will then be firmly on the road to profit on this basket

I could look at dripfeeding the 8 pairs into this approach actually as the 2 X AUD buys on the pairs were not profitable on Entry of basket (and why put a wrong direction in the mix until it changes direction)..............hmmm

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[NVP]

final file note to myself


the GBP during London hours is a major major factor in the success of any trade in this 8 pair basket

I need to consider reducing its power or influence on the basket although clearly that is a 2 way sword and I will lose the big moves that could deliver profitsd quickly


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[NVP]

Chfs kicked in north and I am in clover on the basket

I have no idea if I have now covered my spreads !!!!

hahahaha
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[NVP]

see how important the GBP is in this trade......its damn well carrying the sell position on its own !!

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