Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

Just a quick look before I go
GBP going up, EUR going up JPY going down according to Heuy, Deuy and Leuy so buy the EUR/JPY?

http://www.trade2win.com/boards/for...g-basic-ideas-strategies-127.html#post1011802

ill try and take these one at a time phreddy

remember we have a hybrid system here....so i am trying to comments with a 3 ducks (60ma) hat on and a corrie hat on.....I am not saying this system is the holy grail but we have to start somewhere

ok

theres no buy Euro here as its still below the Yen on the 4h........(3 duck rule)
GBP is ok across all 3

now heres my take with corrie experience hat on.....the divergence on the 5m chart is pretty extreme already for the G/Y and i would therefore expect a retrace before making the buy trade.......patience here....also I would then add in what the G/Y pair chart looked like re any S/R that was around befroe trading

I would also look at the more traditional Corrie 1000/1 for any key S/R + of course the Yen tracks closely to the S&P so I would peek at that as well !!

OOPPS - sorry but i'm not sure if we are allowed to talk about these as we are taking/training on this system in isolation !!

N

 

[NVP]

Re: Correlation Trading - Beginners' Corner

look!!!

Found the answer. Shouldn't be playing with this pair in the Asian session. It is in a 20 pip range and I bought at the bottom.
Got to go now before the big boys wake up and come to laugh at me.

hey phreddy

no ones laughing....and one day I can assure you that you will have the biggest smile on your face when you are the master of this system and making consistent and realistic pips....

heres the charts right now and I tell yuo what I see

Cad is the king on 4h but for how long .....has its time passed ?
theres only 1 currency on the 4h that is slowly rising consistently and thats the Euro.....so do we ditch the 3 duck system as it says no buy unless above others ?

taking everything into account (and it is difficult for me just to look at this one system).....I see classic Correlation signals at the moment and would be comfortable selling tag and buying Europair and possible CAD and AUD as well dependent on your own preferences....

pay attention to the Zero line as well....currencies above the Zero line are currently trending > the 60ma to the G8 and vice versa for below the Zero line.......

also since we are not worrying about spreads and other details the Swissie is a great "foil" to trade against any other currency you feel is moving strongly in 1 direction.....the swissie is pretty flat normally and with a decent S/L you can ride the whipsaws and make some steady money if the other currency delivers.....

so......theres a real woolly answer !
N

 

[NVP]

ok apologies....work calls

the markets are moving tag down europair up and some nice trades buying
into the retraces....more later !

N

 

[NVP]

Hi all.....

quick pop in........

the GBP is trying real hard to make a comeback upwards isnt it !

I see the USD on a resistance level on the 30m so it could finally start falling a little again

markets are pretty neutral....... I would like to see them rising to support the USD fall....(espec gold)

time will tell :smart:
N

 

[phreddyinbg]

Re: Correlation Trading - Beginners' Corner

hey phreddy - no ones laughing....N

Know that you wouldn't really, nor Simon. I am just spending too much time on my school old boys web site!!

My CAD/USD call earlier, look where it is now!!:clap:

 

[NVP]

a.m. action on G/U .....how do you like your risk ?

hi guys

heres the fascinating action as seen through the index corrie this morning....just a question of where you like your risk served up on 4 consecutive times !

that indexcorrie is a pure 20/1 setting this time around

(left to right)

point 1.....G/U hits the 20 ma for first time ....markets still above the zero ....gold was falling fast though.....trade or no trade ?

point 2.......G/U attacks 20ma again..markets still holdingup but falling again...trade or no trade ?

point 3....G has now breached down on the U's 20ma.....G fallen big time on indexcorrie and uSD risen big time...markets falling but still above the zero ....gold has fallen below Zero finally..trade or no trade ?

point 4..have we missed the boat ?......commodities are finally below zero again and GBP extended in fall..trade or no trade ?

there were 60 pips on the table on /U between first and last points........so would and when would you have pulled the trigger ?

........or would you have traded E/U or even E/G instead ?:whistling

damn NVP !......you ask us to do all this damn thinking instead of just trading when the red light indicator flashes on my $2000 orgasmatron black box..

seems like much to much hard work to me .....

N

 

[phreddyinbg]

Heh, there are five of us looking at this thread!! We three and two guests!!

USD gave the GBP a bit of a hammering - reflected in me ducks you'll see! Green in all three upper bands red in all three lower bands. Coming back though.

I was watching for the 'big number' bays to come wading in. Sure enough through the 1.6000 it went.

 

[NVP]

Re: Correlation Trading - Beginners' Corner

Know that you wouldn't really, nor Simon. I am just spending too much time on my school old boys web site!!

My CAD/USD call earlier, look where it is now!!:clap:

brilliant call my friend.........you actually got those pips with USD rising as well as CAD... so shows how powerful the violatile CAD can be !

11/10
N

 

[NVP]

Heh, there are five of us looking at this thread!! We three and two guests!!

USD gave the GBP a bit of a hammering - reflected in me ducks you'll see! Green in all three upper bands red in all three lower bands. Coming back though.

I was watching for the 'big number' bays to come wading in. Sure enough through the 1.6000 it went.

phreddy........i've seen 10+ at times so dont worry ....we have a lot of fans slowly joining the party...

you keep calling plays like like the Cad/USD earlier and you'll be even signing autographs soon

N

 

[phreddyinbg]

I went to look at your USD/GBP post read the points, looked for the numbers - not there you expect us to count the lines, jees NVP you are making this harder by the day.

Have you coded your 5min bars a little different to most people? Looks to me that green goes down whilst red goes up. Or is it just me?

 

[phreddyinbg]

Went back again after making notes. I see what you mean about the break of the 20ma but how does that relate to the Corr chart?

Re-read the original post. Where is the market? or rather how do I see it?

Thanks

 

[NVP]

I went to look at your USD/GBP post read the points, looked for the numbers - not there you expect us to count the lines, jees NVP you are making this harder by the day.

Have you coded your 5min bars a little different to most people? Looks to me that green goes down whilst red goes up. Or is it just me?

Hi Phreddy


my charts are the same as yours.......possible issues

time differences on broker.....my time zone not necessarily your time zone poss 5-8 hours different ?

all feeds must be running....is NZD working on yuor charts (turquoise ?)


lets start with these

n

 

[NVP]

Went back again after making notes. I see what you mean about the break of the 20ma but how does that relate to the Corr chart?

Re-read the original post. Where is the market? or rather how do I see it?

Thanks

the indexcorrie includes some market feeds on it (if you have them with your broker).....It is not on the thread as a download as I want people to test and play with the main corrie first (to understand the principles) and also contribute to the thread a little first so that we all can learn from everybodies input and sharing...

you have contributed a lot already so would you like the corrieindex indicator ?

N

 

[NVP]

Hi all

thats about it from me for a while......my wife has hijacked the pc to send xmas greetings to all and spread goodwill

i'm off to canaries tomorrow (hopefully ) so will pop in and respond to any questions if/when I can......

enjoy the holiday period (re-charging and re-searching ?) and i am looking forward to developing both myself and this thread in 2010.........arty:

hey !!.....perhaps I may even get back in the ole Trading saddle in 2010 after a few years in the wilderness

later all.......JRP have you got the dress on yet darling ?
N

 

[phreddyinbg]

On another thread I found this and since we are taking indexes into account I thought that it might me pertinent:

Nikkei 225: Before London/euro opens, make sure to check the Nikkei 225. If it is significantly up ... euro-yen and pound-yen would probably go up after London opens.

Before London/euro opens, make sure to check the Nikkei 225. If it is significantly Down ... euro-yen and pound-yen would probably go down after London opens.

Dow Jones Industrial: 1 Hour after US session opens, make sure to check the Dow Jones Index, If it is significantly up.....Euro-yen and Pound-yen would probably go up.

1 Hour after US session opens, make sure to check the Dow Jones Index, If it is significantly down.....Euro-yen and Pound-yen would probably go down.

Wishing all our readers a Merry Xmas and a Happy New Year

 

[NVP]

On another thread I found this and since we are taking indexes into account I thought that it might me pertinent:

Nikkei 225: Before London/euro opens, make sure to check the Nikkei 225. If it is significantly up ... euro-yen and pound-yen would probably go up after London opens.

Before London/euro opens, make sure to check the Nikkei 225. If it is significantly Down ... euro-yen and pound-yen would probably go down after London opens.

Dow Jones Industrial: 1 Hour after US session opens, make sure to check the Dow Jones Index, If it is significantly up.....Euro-yen and Pound-yen would probably go up.

1 Hour after US session opens, make sure to check the Dow Jones Index, If it is significantly down.....Euro-yen and Pound-yen would probably go down.

Wishing all our readers a Merry Xmas and a Happy New Year

Hey Phreddy !!

Good observations and yes these are things to take into account

I am enjoying a pleasent rest here in the canaries and with no screens or distractions have finally started to get a few things down on paper.....

I would say since starting this thread and publically starting to "walk the talk", I have been priviledged to learn a lot more about myself and correlation....(thats
now 0.001 % of the learning done then ! ) mainly due to some staggeringly generous people sharing their time and experience of the markets (you know who yuo are guys !)

I am aiming to publish more of thses observations in 2010 and hopefully develop some much more usable approaches to Forex correlation and some very robust trading strategies....

I STILL need loads more assistance and input from people like Phreddy and the others here....and rest assured the team that develops this and pioneers the path we are now walking will be rewarded over time with the forex knowledge and experience that correlation provides in UNDERSTANDING why the market does what it does....

to be successful in anything you must first understand it totally and fully (not superficially), and then start to leverage that knowledge as the situations present themselves ....and they do...across all forex Currencies and timeframes day in day out.......you dont get this by using a few indicators and buying a black box system....as once it fails (and it will) you think its broken and move on ....totally missing the point

theres a brilliant interview (they all are)in the Market wizards books and I love the phrase this particular trader uses............I try to look for situations where the markets drop some money on the floor - and I just step in and pick it up .............

thats exactly where I want my correlation knowledge to take me to....low risk easy Trades backed by market confluence and confirmation

anyway i´m back on 4th Jan and cant wait to get back into action....

I notice we are pushing 20,000 posts so thank you all for viewing and please pop
in and talk to us.....as we are happy to chew the cud with whatever you want to
discuss !

Neil :smart:
NVP

 

[NVP]

On another thread I found this and since we are taking indexes into account I thought that it might me pertinent:

Nikkei 225: Before London/euro opens, make sure to check the Nikkei 225. If it is significantly up ... euro-yen and pound-yen would probably go up after London opens.

Before London/euro opens, make sure to check the Nikkei 225. If it is significantly Down ... euro-yen and pound-yen would probably go down after London opens.

Dow Jones Industrial: 1 Hour after US session opens, make sure to check the Dow Jones Index, If it is significantly up.....Euro-yen and Pound-yen would probably go up.

1 Hour after US session opens, make sure to check the Dow Jones Index, If it is significantly down.....Euro-yen and Pound-yen would probably go down.

Wishing all our readers a Merry Xmas and a Happy New Year

Hi Phreddy

correlation strategies teach me to observe currencies in isolation and therefore allow me to (try to) identify characteristics that are a little blurred when we are constantly diluting them by observing them in pairs mode

the Yen and USD walk similar paths but have a few sublties that differentiate them

I am a big fan of the following market/forex relationships and will be developing these in 2010

Markets vs Yen (espec S&P)
Gold vs USD

I personally do not try to attach to much relationship-wise regarding non tag currencies and their relationships with the (non forex) markets.........

I find any relationship distinguishable is actually a by-product (or sub relationship) based on that currencies interaction with the Tag Team as a pair (not direct to the markets)

so if I see the equities rising it tells me that the Yen should be falling and I take my trades from there.........I will happily take most of the remaining G6 currencies as a trade with the yen if it makes sence......its just that for most people the GBP and or Euro are obviuos currencies to use as they normally deliver in the opposite direction to generate a decent overall pippage return.

I like to see nikkei lead the chase into the London openings but would always like to see some support from early DAX and the S&P futures before selling Yen...

interestingly the Nikkei vs yen is one I want to look at a lot more as there are some interesting non correlations here as well.......the Far east markets dont correlate as closely to the westernised markets as they should ....so this is a great area for me to start with

N

 

[NVP]

Happy new year !!!

Hi everyone:cheers:

Thanks for all of your patronage in 2009, and a special thanks to those who participated
and helped me so much in the year with the thread

I look forward to a lot of fun (and pips) in 2010 !arty:

Neil
NVP

 

[phreddyinbg]

Happy New Year to you Neil and thanks for the effort that you put into this thread to help us understand the mysteries of correlation.

Looking forward to seeing you here again after you have had enough sun on your back.

 

[NVP]

Happy New Year to you Neil and thanks for the effort that you put into this thread to help us understand the mysteries of correlation.

Looking forward to seeing you here again after you have had enough sun on your back.

Hi Phreddy

happy new year to you !



i am really looking forward to 2010 and have a few ideas up my sleeve

Looking forward to seeing what you can do for us in the triple corrie 3 ducks system.......or as you now call it hewey duey and lewey....
(hey works for me !)

this is a devistating system...and I would love to spend more time on it alongside the other potential developments and the scalping of course !

I really appreciate your efforts here on this thread as a fellow full time worker who is trying to develop their trading side for future income streams .....our efforts will pay off in the end believe me

meanwhile spend as much screen time as possible on the corrie T60 1 setting and get accustomed to how it works and the currencies relate to one another

I am also not saying that the 60ma is the perfect setting either...to be honest I am a little uncomfortable with the step ups in the TFs as I feel the lower one is a big jump to ther next.....but then what do I know ?

5m60 to 1h 60 = X12
1h 60 to 4h 60 = X4

one thing for sure though I like the 1h and 4h 60 TF´s as the pictures they give certainly line up the trends for the shorter timeframes (using the 5m 60 or others !)

as a broader commentary I would recommend we examine the potential of when the Tag team are either both below or above the Zero line as this is a very rich vein to trade with

until monday now :smart:
N