Best Thread Correlation Trading - Basic Ideas and Strategies
Jason Rogers
Senior member
- Messages
- 2,772
- Likes
- 93
Hi NVP,
Due to Hurricane Sandy, US equity and futures markets have been closed or subject to reduced hours. As a result, trading on the following CFD products was closed at 9:15am EDT: US30, SPX500 and NAS100.
These products will remain closed until the CME exchange provides additional details on reopening: Futures & Options Trading for Risk Management - CME Group
Jason
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
Hi Jason
doent surprise me.....looks like it could be a while as well talking to my US NY colleagues
while your quiet & bored....please tell me what you think will be the strongest currency in Q4 on my Poll post !
thanks
N
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
mornin all.....
and a big Hi to all the gang there not yet members of T2W viewing this thread - hope you are enjoying the show !
ok the Dow is back in action on FXCM (see below)
I see it hit the 13,000 again yesterday - expected given the East coast turmoil that is unfolding .....markets dont normally rise on uncertainty !
today and overnight its Drifting....but the Dow is below its 20ma on 4H and 1hr so plenty of opportunities to Buy the Yen and USD if they show bull moves above the Zero line on my FXcorrelator indicator (bottom of charts)
this morning the Yen obliged on the 1 hr but not USD so far....again unsurprising given the conditions out there
I'm watching those support and resistance lines to give me more clues for action later today ....
later
N
and a big Hi to all the gang there not yet members of T2W viewing this thread - hope you are enjoying the show !
ok the Dow is back in action on FXCM (see below)
I see it hit the 13,000 again yesterday - expected given the East coast turmoil that is unfolding .....markets dont normally rise on uncertainty !
today and overnight its Drifting....but the Dow is below its 20ma on 4H and 1hr so plenty of opportunities to Buy the Yen and USD if they show bull moves above the Zero line on my FXcorrelator indicator (bottom of charts)
this morning the Yen obliged on the 1 hr but not USD so far....again unsurprising given the conditions out there
I'm watching those support and resistance lines to give me more clues for action later today ....
later
N
Attachments
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
and YEN !!!.......dont start rising yet .....I want to get everyone to vote on my Q4 strongest currency Poll BEFORE you start whapping up the chart and Win !
hey all - please vote below .....c'mon if you want to be traders you need to start working that grey matter and thinking about strategic calls !
http://www.trade2win.com/boards/forex/160932-strongest-g8-currency-q4-competition-3.html#post2001100
hey all - please vote below .....c'mon if you want to be traders you need to start working that grey matter and thinking about strategic calls !
http://www.trade2win.com/boards/forex/160932-strongest-g8-currency-q4-competition-3.html#post2001100
Attachments
Last edited:
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
heres my gameplan......
this is the Weekly FXcorrelator...20ma default settings
Remember I am just talking here about my opinions and why I feel the Yen will be probably a buy
in Q4.....its not a trade call....
My Trades are made based on decisions made at that moment and with all dynamics and supporting evidence in place .....this is just fun !
I figure Q4 will be Generally a sub 13,000 experience for the Dow - and that means my USD and YEN team will rise up and hopefully win the Q4 race......
generally Yen has more pace and speed than USD so I am banking on that for it to beat its partner...plus I figure USD will not be the 10000% safe haven we like until all the dust has cleared on the Election hangover and the Fiscal Cliff.....
now if that 13,000 resistance holds (or BoJ funpolice sell Yen) and I am proved wrong....then I'm eating humble pie for xmas dinner !
C'mon - please vote now....Cap's on board so looking for everyone to play !
N
this is the Weekly FXcorrelator...20ma default settings
Remember I am just talking here about my opinions and why I feel the Yen will be probably a buy
in Q4.....its not a trade call....
My Trades are made based on decisions made at that moment and with all dynamics and supporting evidence in place .....this is just fun !
I figure Q4 will be Generally a sub 13,000 experience for the Dow - and that means my USD and YEN team will rise up and hopefully win the Q4 race......
generally Yen has more pace and speed than USD so I am banking on that for it to beat its partner...plus I figure USD will not be the 10000% safe haven we like until all the dust has cleared on the Election hangover and the Fiscal Cliff.....
now if that 13,000 resistance holds (or BoJ funpolice sell Yen) and I am proved wrong....then I'm eating humble pie for xmas dinner !
C'mon - please vote now....Cap's on board so looking for everyone to play !
N
Attachments
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
thats interesting ..and still the Yen went up overnight ! 
joking aside that doesnt bode well for a rising Yen in Q4....but we havnt seen yet what everyone else will do to trash their currency
N
BoJ eases policy for 2nd month
©AFPThe Bank of Japan has taken the rare step of easing monetary policy for the second month in a row, conceding that its 1 per cent inflation target would not be reached without more aggressive stimulus.
The central bank expanded its asset-purchase programme by about Y11tn ($138bn) to Y91tn, mainly by adding Y10tn of government bonds and bills. It will also buy Y500bn of exchange traded funds, Y300bn of corporate bonds and Y100bn of commercial paper.
joking aside that doesnt bode well for a rising Yen in Q4....but we havnt seen yet what everyone else will do to trash their currency
N
BoJ eases policy for 2nd month
©AFPThe Bank of Japan has taken the rare step of easing monetary policy for the second month in a row, conceding that its 1 per cent inflation target would not be reached without more aggressive stimulus.
The central bank expanded its asset-purchase programme by about Y11tn ($138bn) to Y91tn, mainly by adding Y10tn of government bonds and bills. It will also buy Y500bn of exchange traded funds, Y300bn of corporate bonds and Y100bn of commercial paper.
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
hey all
per my earlier update.......Dow futures in fact went north and busted out of the Resistance line ......only USD has gone south of the border though so up to you if you traded the USD SELLS
I am surprised at YENs strength given the overnight news.......
N:smart:
Attachments
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
this is a good piece from Boris at BKforex
I actually stepped away from trading for a few years whilst having a stupidly busy job in NY and was also commuting to help as much as was possible to support and comfort the last few years of my frail parents and sister....
I was trading as well and got well and truly clobbered ..........so I stopped !
N
There is a great chapter in Market Wizards about Bill Lipschutz the "Sultan of Currencies" who finds himself on the wrong side of a 2 Billion dollar USDJPY trade to the the tune of a -60 million dollar floating loss. Mind you that up to that time Lipschutz had been making about 250,000 dollars per day trading FX for his employer Solomon Brothers. That single bad trade threatened to wipe out a career's worth of earnings.
Lipschutz's colleagues were amazed at his cool approach to the situation. One of his deskmates remarked that if this had happened to him, he would have just got up and walked out the door since he was doomed to be fired anyway. Lipschutz on the other hand remained stone cold calm as he tried to reign in the position. His lack of panic allowed him to ride out the worst of the squeeze and bring the whole trade back in at a12 million dollar loss. "By the time it was over," he remarked, "a loss felt like a win".
I had my own Lipschutz-like moment this week that was considerably smaller in size but no less painful psychologically. I made a series of mistakes that nearly wiped out two months worth of profits in a matter of hours. Family obligations and a variety of psycho dramas pulled my attention from the screen, leading to a number dumb decisions that not only resulted in losses, but in losses in size.
So several takeaways from the experience.
1. Don't trade when you get into a fight with anyone, friend, family or foe. Trading is like surgery. It requires your complete and total dedication. When you are agitated you will make mistakes.
2. Don't compound the problem. If you are going to lose big, do it on small size. My final losing position was two times my normal size and it was the trading equivalent of rubbing salt on wound.
3. Now that you messed what next?
That is ultimately the critical question. As human beings we will inevitably make mistakes. The key is what we do next. The single most important thing, in my opinion, is not to try to get the money back all at once. The only way to recover from bad trading losses is to follow the original strategy that worked in the first place. I my case it took forty trades to recover the loss at an effective rate of 2.5 pips at a time. That was a long slog, but I did it. Much like Lipschutz I didn't curl up and quit. More importantly by recovering properly I now have more confidence that I could overcome such obstacles again. So yes, sometimes in trading as in life, a loss recovered can be sweeter than a win.
I actually stepped away from trading for a few years whilst having a stupidly busy job in NY and was also commuting to help as much as was possible to support and comfort the last few years of my frail parents and sister....
I was trading as well and got well and truly clobbered ..........so I stopped !
N
There is a great chapter in Market Wizards about Bill Lipschutz the "Sultan of Currencies" who finds himself on the wrong side of a 2 Billion dollar USDJPY trade to the the tune of a -60 million dollar floating loss. Mind you that up to that time Lipschutz had been making about 250,000 dollars per day trading FX for his employer Solomon Brothers. That single bad trade threatened to wipe out a career's worth of earnings.
Lipschutz's colleagues were amazed at his cool approach to the situation. One of his deskmates remarked that if this had happened to him, he would have just got up and walked out the door since he was doomed to be fired anyway. Lipschutz on the other hand remained stone cold calm as he tried to reign in the position. His lack of panic allowed him to ride out the worst of the squeeze and bring the whole trade back in at a12 million dollar loss. "By the time it was over," he remarked, "a loss felt like a win".
I had my own Lipschutz-like moment this week that was considerably smaller in size but no less painful psychologically. I made a series of mistakes that nearly wiped out two months worth of profits in a matter of hours. Family obligations and a variety of psycho dramas pulled my attention from the screen, leading to a number dumb decisions that not only resulted in losses, but in losses in size.
So several takeaways from the experience.
1. Don't trade when you get into a fight with anyone, friend, family or foe. Trading is like surgery. It requires your complete and total dedication. When you are agitated you will make mistakes.
2. Don't compound the problem. If you are going to lose big, do it on small size. My final losing position was two times my normal size and it was the trading equivalent of rubbing salt on wound.
3. Now that you messed what next?
That is ultimately the critical question. As human beings we will inevitably make mistakes. The key is what we do next. The single most important thing, in my opinion, is not to try to get the money back all at once. The only way to recover from bad trading losses is to follow the original strategy that worked in the first place. I my case it took forty trades to recover the loss at an effective rate of 2.5 pips at a time. That was a long slog, but I did it. Much like Lipschutz I didn't curl up and quit. More importantly by recovering properly I now have more confidence that I could overcome such obstacles again. So yes, sometimes in trading as in life, a loss recovered can be sweeter than a win.
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
hard work on Gold.....
few signals ....and many are not 100% good due to USD and Gold moving to closely together
I need them ideally Diverging
N
read my Free system and indicator from signature area below ......
I treat gold like a Currency weighted the same as my G8 and then Ive added some more simple rules of combat........
few signals ....and many are not 100% good due to USD and Gold moving to closely together
I need them ideally Diverging
N
read my Free system and indicator from signature area below ......
I treat gold like a Currency weighted the same as my G8 and then Ive added some more simple rules of combat........
Attachments
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
as you can all see we have no Dow ......I'm not trading today
if you want to trade without the Dow signal
Drop the FXcorrelator on any pairchart (20ma default) and trade when the Yen and USD are above/below the Zero
and your favoured currency is on the opposite side of the Zero
i know a lot of guys doing this anyway and ignoring the Equity markets
N
if you want to trade without the Dow signal
Drop the FXcorrelator on any pairchart (20ma default) and trade when the Yen and USD are above/below the Zero
and your favoured currency is on the opposite side of the Zero
i know a lot of guys doing this anyway and ignoring the Equity markets
N
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
mornin all....
well the US Equities will open later today again and we will see what this has done to the markets
My sympathies go out to all the US East coast members here and their families ...I hope the damage has not been to terrible for you .....it looked bad on the TV last night
Dow Futures hit a recent Resistance level overnight (left Chart) sending it south again in asian session.....
Yen / USD correlation is still screwed so no interest from me
this morning trade the 5m and 15m's on purist signals ....dont play games as the market is not really yet back in Karma....
N
well the US Equities will open later today again and we will see what this has done to the markets
My sympathies go out to all the US East coast members here and their families ...I hope the damage has not been to terrible for you .....it looked bad on the TV last night
Dow Futures hit a recent Resistance level overnight (left Chart) sending it south again in asian session.....
Yen / USD correlation is still screwed so no interest from me
this morning trade the 5m and 15m's on purist signals ....dont play games as the market is not really yet back in Karma....
N
