Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

expanding the last post.....

heres the kinda things that have struck me on my correlation journey and that can be expanded in 2010


Scalping/ short T/F

our flagship core offering......trading GBP/Euro/USD - utilising the markets + the Yen as supporting signals

nothing else teases me although I have to confess that gold has recently become tempting on a number of occassions as its tight correlation to USD has made me think of trading that instead of the USD partner lottery !

The Index corrie

This little dude is starting to pay mega dividends in supporting the scalping plays as I get more comfortable with it....but is multi flexible on any Timeframe and setting just like its brother the corrie

its not available on this thread but if you contact me you can have it gladly for free.....but guess what , the price is some committment and input in building this thread to its full potential......not really a big price to pay is it ?

3 ducks and variations

triple Ma system....very powerful and we could have a variety of combinations here
and infinite MA's !......on higher TF's any currency combination can be traded

Individual currencies

Then we can have systems designed around each currency and its correlation characteristics alongside the markets

for example the Yen is much maligned and I can see mega potential returns for this currency by leveraging the market correlations (S&P nice!) and perhaps a more flatter currency partner that the usual ones...(probably the CHF)..on higher TF's the Yens volatility alone is enough for some lovely regular income streams ...

The Dollarator

This is not on any of the 900+ posts so far and I may launch it around post #1000 as a celebration !....its a hybrid of the indexcorrie and could be very useful as a generic trading tool across the major markets......its certainly tested well on Gold (why I keep bleating on about gold in the scalping stuff above) - its not rocket science but very effective in pricing markets for value entries/exits

Convergence / Divergence strategies

remember mikebondi ?....dude dissapeared but perhaps he will return to help fire up the classic areas where we have potential

Euro/Swissie - perhaps Ivan (ingot54) may return for a play ?
NZD/AUD
Euro/GBP (JRP lurves this one )
USD/Yen (yes I said tag team....its massively underated as a Div/Con opportunity )

and thats just a few areas thrown down for starters...........so c'mon join in and start helping us build these strategies.....I am ready to support and help you if you'll help me make this a success :smart:


WE'RE GONNA NEED A BIGGER THREAD !

N

 

[NVP]

Get real !

good old Boris at bkforexadvisors

he tells it straight and something for all Newbies to note after reading the latest
Marketeer's trading profitablity "Guarantee"....

What is the easiest way to tell if a trader is a liar and a fake? If they talk only about their triumphs and promise you a never ending stream of uninterrupted profits. That's why I am always wary of all investment gurus who talk only about their winning positions and never admit their losing calls. Real traders lose money all the time. Real equity curves are jagged and do not follow a 45 degree angle and real investment returns are like real life - a few steps forward and several steps back.


Unfortunately as human beings very few of us are prepared to accept that reality. While almost everyone pays lip service to the word risk - few really understand that it is simply a polite synonym for the word loss. Traders who can't stand loses never win in the end and those who tell you they don't lose are lying and cheating.

are you willing to be totally honest with yourself and call a spade a spade in trading ?

if you're not.......then stop now and go grow some roses....it will be infinitely more pleasurable and a lot cheaper in the long run !

N

 

[phreddyinbg]

Hey lads, it is sinking in. I do believe that I have got it!!!:clap:

I am going with the T60/1

Don't know about all the currencies, I will probably only do four and see what I can forcast from them.:smart:

OK then....watch this space!!

BTW I am in Malaysia for the winter so I may be posting a bit earlier in the day, before you Brits are up.

 

[phreddyinbg]

All ready for the off.
Charts are lined up ready for some ticks to get them going.

 

[NVP]

Hi Phreddy

excellent work !

Remember if you are pure "3 ducks method" then its a 60 ma and delta 1 on
the 3 charts then keep magnifying the chart till its at its biggest and then compact the charts till you can see a few bars or even just 1 !

if all you are putting on your screen is the 3 charts - you could expand them a little if you want !

post tomorrow and I will be feeding back as soon as i'm awake......
N

 

[jrplimited]

Hi All,

Tonight's partaaay rain checked due to freezing weather plus also me running on massive minus brownie points with da boss over past two night's social gatherings antics. Managed to avoid most human contact whilst sober (ish) but got caught by a few people at last night's bash who asked the usual very unclever and boring question of "... what economies and pension funds have you ruined this year? ...". I really do give up trying to explain to these ignorants that my measely Dollars per pop are completely irrelevant in the some three trillion Dollar a day FX markets....

Hi phreddy, good to see you are back here again. How come you and NVP are both off in sunny climes whilst I'm stuck here in the land of gordon "charlie" brown's bust and freezing cold UK? Guess I must be doing something wrong!

Watch out for thin markets from here onwards, its the festive season (so I keep telling wifey!) so double confirmation of trigger points are a real must.

Hopefully I'll be able to catch you all sometime before Santa comes calling - regards,
Simon.

 

[phreddyinbg]

Correlation Trading - Beginners' Corner

...and THEY'RE OFF.... Neil's check list...check, check, check - thank you.
Simon's advice... Not concerned about the market only looking at the procedure, thanks Simon.

Not enough time elapsed for all the charts to be active so it is just 5 and 15 for the moment.

CHF is doing well on both. JPY is down on both so we buy the CHF and sell the JPY
I will look for a chart

 

[jrplimited]

Re: Correlation Trading - Beginners' Corner

Hi phreddy,

Nice one, it looks like you have caught a couple of currency moves to trade within these early hours of a new week - well done!

At the moment I cant see diddly as when trying to retrieve some gold data N asked me for, my MT app collapsed in a heap - thank f*** its not a trading day for me tomorrow!

Keep posting and I'll be catching up with this thread tomorrow.

Trade well and regards,
Simon.

 

[phreddyinbg]

Correlation Trading - Beginners' Corner

Couldn't find CHF/JPY so have another look and we have the EUR on the down side so lets buy the CHF and sell the EUR...
What does that mean for the EUR/CHF. I have never worried about that before, just bought for the price to go up, sold for it to go down.
OK so sell the EUR should mean that I want more CHFs for my EUR so it is a BUY.

My mentors will be along a little later and put me right so I will buy and see. Don't you love demo accounts?

 

[jrplimited]

Re: Correlation Trading - Beginners' Corner

Hi phreddy,

Just managed to get my mt app up and running again - last time I try and retreive any data requests for sure!

Watch out for that CHF, its a notorious "sleeper" and something N usually discards as a basket case when using his corrrie indy. Watch the E and G correlation especially leading up to London open tomorrow {my local UK time} as thats where you will get the bangs for bucks.

Simon.

 

[jrplimited]

Re: Correlation Trading - Beginners' Corner

phreddy,

That Friday close / Sunday opening gap on E/U has to be filled somewhere within the next few hours, so using N's corie indy and that chart overlay indy sent to you last week, look to play the gap and then, once filled and traded, look yet again to fade the same.

Simon.

 

[phreddyinbg]

Re: Correlation Trading - Beginners' Corner

OK so sell the EUR should mean that I want more CHFs for my EUR so it is a BUY.

Brilliant system look at that chart we must be 12 pips up already.

OK, OK, I know...I am working on flawed data, market hasn't been going long enough.

Just practicing... didn't even make the trade, just looking...

But, for all that, I am very pleased with what I have done to understand how this works.

Thanks NVP for perservering with this terrific thread.

 

[phreddyinbg]

Just had a quick look...Time to get out with 15 pips: EUR is in the top half so fighting back price is retreating.

Well that was exciting but now I am off to bed again, it is too early for me to be up. I will leave the market to get another hour or two under its belt and look again.

 

[phreddyinbg]

Re: Correlation Trading - Beginners' Corner

phreddy,

That Friday close / Sunday opening gap on E/U has to be filled somewhere within the next few hours, so using N's corie indy and that chart overlay indy sent to you last week, look to play the gap and then, once filled and traded, look yet again to fade the same.

Simon.

I had forgotten about the new week opening gaps Simon. The EUR/CHF did 64 pips on that.
Really ought to set my alarm and trade them after Xmas.
I will check the other pairs and see what happened thanks. Sleep well.

 

[phreddyinbg]

Correlation Trading - Beginners Corner

Good Morning UK,

I suspect that some of you are out of bed, maybe a bit bleary from more social gathering that went on late.

How about this then GBP is down JPY is up so we sell GBP and buy JPY which equals short GBP/JPY pair!!

 

[NVP]

7.45 round up

Hi all

sorry - been trying to get cars out of a still stupidly snowy hill and drive but given up now so working from home today....I like my car in one piece !

guys will catchup in a minute........meanwhile heres the picture

very flat overnight (and now).....no real breach yet of the 15m bar....(actually E/G is testing second breach of the low now).....we need a little shake and bake to liven things up..........

N

 

[phreddyinbg]

Correlation Trading - Beginners' Corner

Two hours later and what has happened? JPY is down with GBP on the indies. Price has moved a little up.
Wonder what the mentors have to say???

 

[NVP]

Re: Correlation Trading - Beginners' Corner

Hi phreddy,

Nice one, it looks like you have caught a couple of currency moves to trade within these early hours of a new week - well done!

At the moment I cant see diddly as when trying to retrieve some gold data N asked me for, my MT app collapsed in a heap - thank f*** its not a trading day for me tomorrow!

Keep posting and I'll be catching up with this thread tomorrow.

Trade well and regards,
Simon.

opps sorry mate !

if anyone finds some gold bars that went missing on ODL last week please tell us
(sorry in joke)

N

 

[NVP]

Re: Correlation Trading - Beginners Corner

Good Morning UK,

I suspect that some of you are out of bed, maybe a bit bleary from more social gathering that went on late.

How about this then GBP is down JPY is up so we sell GBP and buy JPY which equals short GBP/JPY pair!!

Do you ever get the feeling you've turned up at a party late ?

N

 

[NVP]

Re: Correlation Trading - Beginners' Corner

Two hours later and what has happened? JPY is down with GBP on the indies. Price has moved a little up.
Wonder what the mentors have to say???

hey Phreddy

you are blazing a fantastic trail already with the corrie version of captan currencies 3 ducks !

I know you are trading purely for training at the moment on virtual accounts but let me just reinforce something below to all our Viewers

Trading real money involves risk....when you trade real money please be aware that markets can lose you money very quickly and only trade with money you can afford to lose.

now let me get to grips with the elevators and JRP thanks for input but focus on the ole living you have to make now......i'm here


N