Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

Hi N,

how is it going ?.. yen, chf are so strong now and cad, aud weak.. just wait to some convergence indications.. and not enter to soon (I have to sit on my hands )..

btw Niel, I need your view on correlation between currencies .. it´s always talk about correlations between pairs.. does exist some spreadsheet or whatever with correlation between currencies ? It seems that jpy/chf walk together on some TF etc.. could you somehow answer me ?

thx a lot

K

Hi K and Mark...........

theres a lot of garbage talked about correlation and I HATE the standard pair correlation (%) approaches that are the standard way of measuring

what the hell is the use of measuring the USDJPY vs the EURUSD as a percentage when you have the core individual currencies just sitting their begging to be measured

'll cover some more on this subject here when I get time - busy today at work
N

 

[NVP]

Hi all.............jeeeees what an overnight scenario

incredible money to be made buying yen :!:

look at the yen - it went into an area I have NEVER seen regarding strength in 3 years of watching

CONVERGENCE

the Yen went to 0.00018 on the 5min 500 ma chart.......thats 9 bandwidths North.........from Zero

So in fact at one point we had a 15 band divergence on the AUDYEN and the NZDYEN

as I emphasised yesterday....convergence plays are tricky and you need to ensure that you have evidence that the currencies involved are starting to come home first

or you will get hung out to dry.......stick to divergence until you know what you are doing :smart:


N

 

[NVP]

and the U/J is still tradable as a very tight correlation to DOW at present

overall the markets are still like shooting fish in a barrel so please donate a % of winnings to Japan relief funds as you would not be making this kind of money otherwise

N

 

[NVP]

see how the yen and swissie have become the new tag team

usd is dead..... long live the yenCHF tag team.....

N

 

[NVP]

hey all.............a few pips buying euro and gbp recently

n

 

[NVP]

Hey all

thought I'd drop this into the pot...........a response I made to someone on my pm's

Hi NVP,

I've followed your posts on Forex Factory and T2W and am impressed
with your style of trading. Can you tell me what commercial systems
and services you offer and how they differ from the system you show in
the forums?

Thanks,
E

Hi E

I was planning to offer commercial services and systems a long long time back when I had a professional programmer as a full time partner and we were making rapid progress in the direction I wanted re Strengthmeter/Market Correlation / Dynamics

at this moment progress is slower as I now use freelance programmers and volunteers, and am still doing a lot of development fine-tuning my personal systems but it takes time alongside other work committments and projects............in truth i'm not even physically trading much at present

The systems are all based around the FXcorrelator principles (currencies and other markets) but are
much more automated and able to recognise multiple correlation patterns that I have identified to ensure more profitable trading signals

So for example having the yen and USD on the same side of the Zero is just one of many conditions
that indicate a potential trade for me........(and sometimes this is not even included in the conditions
I look for !)

I will let people know If I ever come to market with some of these ideas that are constantly
under stress testing and are faring incredibly well in the current market conditions

meanwhile the Tag team aligned above/below Zero on selected MA's (I use 80 and 20) together with
some Dow inverse correlation is a robust system that delivers regular profits if used with other price
action confirmation (any TF !!)......so use and improve on it.......

and then Please tell me how you did it ! :smart:

Best Regards
N

 

[NVP]

Dows being tested on recent rises at 11,700......if it folds then the yen/CHF must go north again.

 

[NVP]

another Money week special (well with a couple of amendments by moi)

I want to earn $2m a year please .......and I have $300 in my pocket to start

it would not surprise you to learn I once got thrown out of a "seminar" similar to this stuff .......a 12 year old was showing simple Ma's on a chart and showing how you couldnt lose on trades......after my 5th question was answered with increasing levels of bu*ll*hit I was asked to leave by 2 helpers who came and escorted me out

i'm not saying its these guys.......as that would be a libelous statement

but certainly beware as some companys offer this kind of Seminar and its a lions den I can assure you and difficult to extract yourself from as they will be looking for a cheque before you leave

anyone who mentions £2m in a statement is clearly selling hard though......

just imagine this was an advert to sell you some golf Lessons and it said that some golf players earned millions of dollars a year .......now can you see how misleading and rediculous this kind of advertising is ?

N

 

[NVP]

Sleeping beauties

hmmmmmmmmmm

it means the europeans are weak......

N

 

[NVP]

i'm not sure what G5 (non tagchf) is doing well at the moment !

 

[mark4x]

I've been loading the indicators on another computer and I notice I'm not getting the 3 rows of arrows to display using the FXCORR-V5b. Anyone else have this happen? I can't figure it out.
TIA

 

[NVP]

yen was unloaded......

the Aud and Nzd were active and the cheapest currencies in recent days so they got bought up first then the others based on recent price....

Chf fell because it got dragged down in the current as Equities rose.....

Biggest bang achieved for the BoJ was at thinnest market time ......

like shooting fish in a barrel ......

N

 

[NVP]

hey all

3 trading opportunities today ...............some were a little bendy in rules though

N

 

[NVP]

hey all

I have learned a lot about my systems this week - including

1) they are consistent and robust
2) the helicopter vision gives enomous potential to develop new
models and strategies

but i'd prefer not to be utilising them under such terrible circumstances again ......:|

heres the week ...........look at how flat the usd was .......so yen got a new friend

and look at how the BOJ go what they wanted by friday .......yen back to how it started in the week

N

 

[mark4x]

Neil, can you tell me the settings you're using with your FXCORRELATOR_Boldtag indicators? I tried searching but I may have overlooked it. I'm not able to pull up the same indicators as you've shown above and I'm trying to experiment with different settings.

many thanks!
Mark

 

[NVP]

Neil, can you tell me the settings you're using with your FXCORRELATOR_Boldtag indicators? I tried searching but I may have overlooked it. I'm not able to pull up the same indicators as you've shown above and I'm trying to experiment with different settings.

many thanks!
Mark

hey M

everything I use on this thread are in the signature stuff below

the boldtag simply bolds up my dynamic duo...

here is my core system

1 corrie set on 80ma delta 1
1 Corrie set on 20ma delta 2

ensure the Tag team are aligned same side and trade opposing currencies

actually last week if you had done this instead for chf and yen as tag team it was very effective as a trading system - look at below again and focus on the grey and yellow lines as a combo......the USD is in correlation limbo at the moment due to market dynamics and a Fed intent on destroying it...... :smart:

N

 

[Adamus]

actually last week if you had done this instead for chf and yen as tag team it was very effective as a trading system - look at below again and focus on the grey and yellow lines as a combo......the USD is in correlation limbo at the moment due to market dynamics and a Fed intent on destroying it...... :smart:

N

Neil, that's great advice now but obviously we've got 360 degrees of hindsight from here. What I'm thinking is, could I actually have gone with the CHF and JPY as tag team at some point last week and made some dough out of it? I remember your comments about their behaviour, do you remember actually thinking 'now is the time to follow CHF and JPY instead?' and also of course, do you think you will recognise the point where the old USD - JPY correlation kicks back in?

I know I would be lost and clueless if I'd starting trading the fxcorrie last week, but with your experience, do you think it could have been done? Say by Wednesday were you convinced already?

 

[forexkunta]

Adamus,
Had you been trading jpy crosses and chf crosses last week, then yes you would have done well. I accidentaly doubled my trading account last week on gbp/jpy and usd/chf. I trade these two pairs pretty exclusively, and just happened to be on the right side of the moves last week and did very well. Of course, that is not going to happen every week. I was actually trading with good money management and caught that once a year trade that made a hellava impact. The last time GBP/JPY made a move like last week was May 6, 2010, during the flash crash of the DOW. The wave form is almost identical to this week. It also seems that these two pairs became very correlated around Feb 2, about two weeks before the DOW started its current move down.

Neil, that's great advice now but obviously we've got 360 degrees of hindsight from here. What I'm thinking is, could I actually have gone with the CHF and JPY as tag team at some point last week and made some dough out of it? I remember your comments about their behaviour, do you remember actually thinking 'now is the time to follow CHF and JPY instead?' and also of course, do you think you will recognise the point where the old USD - JPY correlation kicks back in?

I know I would be lost and clueless if I'd starting trading the fxcorrie last week, but with your experience, do you think it could have been done? Say by Wednesday were you convinced already?

 

[NVP]

Neil, that's great advice now but obviously we've got 360 degrees of hindsight from here. What I'm thinking is, could I actually have gone with the CHF and JPY as tag team at some point last week and made some dough out of it? I remember your comments about their behaviour, do you remember actually thinking 'now is the time to follow CHF and JPY instead?' and also of course, do you think you will recognise the point where the old USD - JPY correlation kicks back in?

I know I would be lost and clueless if I'd starting trading the fxcorrie last week, but with your experience, do you think it could have been done? Say by Wednesday were you convinced already?

Hey Adam

a very good question and in fact something that destroys most traders over the long term...............we chose to play in a business that is infuriating and exasperating.......

our own (Robust) systems and ideas are challenged every minute of every day we are trading ........we are sailing our fragile ships in a permanent "perfect" storm trying to make a few pips before the next wave hits us........

and all the while we are receiving teasing communications and messages from desert island paradises with perfect weather, beautiful people , unlimited drinks and pleasure with abundent wealth and pips that are falling from the markets with ease on those big moving currencies and trades you have been warned about...........you are looking at hindsight charts showing you the huge pips you missed whilst your stormwrecked ship is hauling in meagre pippage......

all you have to do is step off the side of your battered ship into the dangerous water and swim to the shore where they are waving at you........give up those systems that pay such meagre returns..... .unlimited wealth awaits you


will you do it ?.............:smart:

N

 

[NVP]

look at the 1 hour last week again below............

I post a weekly chart to show where the money went as a update for people and also comment where the perfect trades were.............

but no-ones perfect..........and trading is about making money .....not being perfect

usd was a perfect flat wall for trading every other currency so that was fine with me whether it moved with yen or not......

in answer to your question once the yen and chf are aligned above / below 20ma and 80ma and the equities are inversely supporing the move theoretically thats a trade against the rest of the currencies

but abandon my beloved usd ?....... not yet my friends :smart:

N