Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

tight correlation on the Euro and Gbp now going south.......

 

[NVP]

Dow finally got tag team north overnight

N

 

[NVP]

GBP getting bashed outside of standard correlation dynamics

N

 

[NVP]

hey all

I was just trawling for an article TD posted years ago and found this thread in the search
not bad at all TD ............

http://www.trade2win.com/boards/first-steps/34457-lessons-successful-traders.html#post456439

 

[NVP]

heres extracts :-

10. See the bigger picture

You have to have the ability to see the bigger picture. Where are we on the higher timeframes? How much room do we have to move? The FXcorrelator in my book is the ultimate way to view the markets - all G8 on a chart and across multiple Timeframes (at least 3).....thats seeing the the big picture


11. Get involved

Invariably, those that make big money, get involved. You need to live and breathe your market to make money consistently. Watch it as much as you can. Time spent watching is time spent learning Jees I cannot recommend this enough - regardless of the system you use .........watch it until the cows come home ....and especially in volatile trading periods like recent weeks .......you will learn and learn and learn....and keep learning.....:smart:

 

[NVP]

finally it starts coming together..... but hard hard work

 

[NVP]

TOUCHDOWN GBP SOUTH arty::cheers::clap:

its Video time !!!
N

 

[NVP]

man oh man the joint is rocking......Euroteam are being destroyed by everyone

N

 

[NVP]

and if anyone is interested the Aussie Twins are running very tightly with the Tag team North

Now this correlation will not last into the late US session i can guarantee you

Like the Red arrows ............watch for the peel off and then trade it HARD

the Dow is no use here at all

N


http://www.youtube.com/watch?v=DE-A4rLyWW8&feature=related

 

[NVP]

my money is on buying Aussies into a falling tag team.......

I wouldnt trade it though as its not a core strategy

just an observation from my box of tricks !

N

 

[NVP]

Chfs leading the tag team south ......lets see

 

[NVP]

and in terms of Convergence plays theres only 3 bandwidths on any pair at present (5mins) which is not sufficient for me to wager my hard earned money

see the posts below re convergence trading for details
(in signature area below)

N

 

[NVP]

cancel that ........look at Dow tumbling !!

 

[NVP]

Dow still southerly but the tag are peeling from the aussies slowly now :smart:

big convergence plays in progress

N

 

[NVP]

Dow still southerly but the tag are peeling from the aussies slowly now :smart:

big convergence plays in progress

N

See how the Dow helped the aussies peel off from the Tag family ?

damn I wish I had traded that now ......

N

 

[NVP]

wow .............dow getting north now and the Eurotwins are very lethargic

could be a mega session for the aussie twins coming..if you sold chf into them as well its already
a pipfest...

N

 

[NVP]

ok as I leave you (more work calls) the eurotwins are in the gutter and only the Aussie twins are getting love from the worlds money

meanwhile heres the Black swan boys telling us why Germany loves the Euro ....or is that the BS boys ? :smart:

N

 

[horacioofman]

Hi Neil,

I am not a programmer so it is little what I have to offer. But hey, I got lucky and I managed to do a quick fix to the fx-correlator
I noticed that when you pointed the mouse over each of the currency lines, it said Value1, Value2, and so on.
I did a little reasearch and i find the way to display the currency name instead.
This improvement will mainly benefit to corrie newbies, as you know what each color means. but i though it was worth doing this little contribution for other new users to this tool.

Hope you like it

Regards,
Horacio

PS: I haven't changed any of the code. I added a line with the instruction setindexlabel(i,"xxx")

I renamed version 5c

 

[NVP]

See how the Dow helped the aussies peel off from the Tag family ?

damn I wish I had traded that now ......

N

http://www.trade2win.com/boards/for...g-basic-ideas-strategies-820.html#post1482670

mornin all .....

Damn but those Aussie Buys just got better and better !

I recognised the tight correlation from this post and said to watch for the brakeway...........nice pippage there once dow got bullish.......those max / min price levels on the A/U and N/U charts were never achievable but i'll take credit for say 50% of the values to be safe :cheesy:

http://www.trade2win.com/boards/for...g-basic-ideas-strategies-819.html#post1482488

watching breakaways is up there in my top drawer of things to watch for..........when you see certain currencies running together that dont ususally ......just wait for the breakaway and trade it ......especially if you have a nice catalyst like the dow moving or economic news to activate it

here are the 3 groups.........the only combo that is not unnatural is Team 2 and 3 that will run together happily

Team 1 Yen.USD,CHF,CAD
Team 2 EUR,GBP
Team 3 AUD,NZD

so unnatural combinations are

Team 1 and Team 2
Team 1 and Team 3

you can go down to individual currency level taking 1 from each group but more basket/combo pair trading is safer to execute to achieve profitablity

so for example if the GBP runs with the USD for an extended period, look for the peel off and trade the move

on a pair chart this will be seen as a low volatility period where the G/U pair ranges....but the FXcorrelator also shows you the direction they are moving AND brings clues as to the peel off directions based on dow correlation and the proximity of each currency to its Teammates (as they stay pretty tight)

I really need to show this stuff in videos or classroom environment to make it clearer , but its going on 24 hours a day across all TF's and is profitable :smart:

N

 

[NVP]

not much shaking at the moment............Again the Aussies and the Tag team are running together............

N