Hope you enjoyed dinner, Neil - I'm enjoying the thread!
I like the idea of marking possible over-bought/over-sold levels, but as JM Keynes stated:
"Markets can remain irrational longer than you can remain solvent." so these o/b and o/s levels can only ever be a guide! Indeed as Nassim Taleb reports in his acclaimed book (which I have not read yet)
"The Black Swan: The Impact of the Highly Improbable" markets have "unpredictability, consequences and retrospective explainability."
That pretty much covers the theme (in a nutshell) of his other book:
"Fooled by Randomness".......
Thats the guy I was thinking of thks !
I can see that this method can be used very powerfully when price is approaching support and resistance simultaneously with the Corries in agreement.
I noted Neils' comment from Post #83 where he said:
... in lower MA's (sub 100ish) if 2 currencies are running parallel the higher currency is actually still gaining in price verses the lower one on chart....they are not moving at parity This is an important fact to tuck away in the brain. It means that if trading on Corries alone, you need to keep an eye on price when the two level out. It could be that you may miss valuable pips thinking the move is over.
to recap on Ingot54's "nugget" here 
if you have 1 currency above another (espec 1 above and 1 below the zero line) but running parrallel on shorter MA's they are NOT running parallel in price on the pairs chart.....the higher currency is displaying a higher rate of change and is therefore increasing in price to the lower one on the pairs chart......not so much of an issue this on the 200MA
And no, Neil - I am not running out of tunes to "punish or publish" - Youtube is full of the goodies. But I have decided that they clutter up the thread a bit too much! But in deference to your request :innocent: I include one for the road - the late Dan Fogelberg singing:
Same Old Lang Syne.
I love the tunes.....makes our Thread diff to the other drier stuff out there !
In the future I will be taking requests only
!.....well keep em coming !
I have loaded up your latest W30Correlator, but the purple line simply replaces the zero line ... the others are exactly the same, moins de la NZD. Maybe you could explain how to use it ... or if need be, tweak it a tad?......
let me look they look all right on my Metatrader software when I tweaked/tested them this morning
I think we might get more "audience participation" if we recap a bit. So please condescend to allow me to provide a summary to this point:
EXcellent !!!!!
1a) Posts #1 and #2 provide the background as well as the MT4 attachments.
1b) Here are the codes for the colours to remind people quickly:
USD - GREEN
GBP - RED
EUR - BLUE
AUD - GOLD
NZD - LIGHT BLUE
CAD - BROWN
JPY - YELLOW
CHF - GREY
2a) The essence of this method is that currencies do not always need to be represented in PAIRS - they can be represented on a "stand-alone" basis expressed in a single picture, showing the correlation (co-relationship) between each one.
2b) Further to that - the FXCorrelator (Affectionately referred to now as "The Corry") simply shows where each currency is now
relevant to the others.
2c) Additionally, you should know that the
sum of all currencies is zero (ie a zero-sum-game). You can interpret that to mean that if ONE currency rises, then ANOTHER MUST FALL. But you have to be aware too, that when one rises or falls, it does so in relation to one, two, or all of the others.
2d) Most countries of the world have their own official currency, while a few adopt the currency which is dominant or expedient in their region. Not too many countries have their currencies "pegged" any more. China does, but the CNY or Renminbi (or YUAN) was, for a time, allowed to appreciate about 3% to 6% a year, until 2007-8. It could easily explode by 30% if they ever un-fix the pegging. My view is that they will, when the Renminbi is ready to supplant the USD as world currency - look out for around 2012. The reason I include that, is to show that ALL currencies float about like corks in a bucket - one rising another falling - they cannot rise/fall in unison. (They might if the CNY explodes as I said ... !)........
also concerning the big 8 we cover..the markets are not pure and Governments can step in in many ways to try to control their currency....this even includes the odd bit of buying / Selling themselves ! ....watch the Yen for this (a lot) and recently the Swiss guys got twitchy when their boy got toooo pricey against the Euro......
3) The Corry can be traded as a stand-alone system. It is
not necessary to look for support/resistance, RSI, MACD, Stochastic etc - but it
is necessary to know against what
other currency the move is happening, and trade that pair LONG or SHORT, according to the direction indicated...
so can we call this a Corry Trade ?:............
4a) There are
TWO reliable "base" currencies, which can be used to measure the movement of others, and indeed trade them: The USD and the JPY. These are affectionately known in this thread, as the
"Tag Team", and for MOST trades, they are reliable enough to attach to as a trading vehicle......
absolutement
4b) The benefit of using one of the "Tag Team" as anchors, is that you attract
Low Spread and also have a choice of volatility styles. The ***USD pairs will be generally
less volatile than the ***JPY pairs. It is far better to trade EURJPY with a spread of 4 pips, than it is to trade the EURCAD with a spread of 9 pips. For lower volatility, you could trade EURUSD for a spread of 2 pips. This example refers to a rising or falling Euro which you wish to trade
........ive never really gone into the detail on the spreads and why they are so different...especially the more exotics (eg EURCAD)...to me the CAD is less volatile than the GBP so why the better spread offered on the GBPEUR ?
if you trade two opposing high volatility currencies such as the JPYGBP then you stand the chance of making much higher returns per trade than lesser combos.....however if they turn or whipsaw you will be stopped out much more often unless you have large stops in place .....and if its wrong its wrong anyway !
5) If it is noted that the GBP is rising at the same time the JPY is falling, you may simply go long or short that pair. However, it is also possible to play the correlation another way, by "splitting" the pair against another "stable" currency at that time. If the EUR is parallel to the zero line, and the GBP and the JPY are below and above the zero line respectively, then it would be a simple matter to go LONG the EURGBP simultaneously as you go SHORT the EURJPY. There would be times that this strategy would be very effective - eg when BOTH the EURGBP and the EURJPY are at support and resistance respectively
.........I need to think about this one Ivan.......to be honest up to this point I personally have only used the Corrie to identify a good trade on 1 pair...but thats me !
EDIT: 5b) If you are already wishing to trade one of the "Tag Team" ie the JPY, then it is not good practice to use the other partner (the USD) to trade, unless you are looking for lower volatility. In this case, you would simply trade the GBPUSD and not the GBPJPY. Be careful though - it could well be that the USD is in tandem with the GBP (they are frequently positively correlated) and the trade would fail.
I think that is enough for now ... but could I encourage people to load-up the indicator from Post #2 and build the Correlator into its own chart as Neil explained in Post #70. That is easy - if you are struggling a bit - just let me know and I can clearly explain how to do it in easy-to-follow steps
....thanks mate that would be appreciated !
EDIT: Do not be put off by the seemingly endless possibilities to be learned here - they
CAN be quickly picked up and used.
(:!: and believe me they can ....just put different glasses on and stop thinking about currencies as PAIRS ......the corrie brings all 8 currencies to life as "3d" standalone PERSONALITIES in their own right, each displaying unique traits and mannerisms just like any other standalone Indice such as the WS30 or the DAX... .:!:
Just build your correlator ... and it will come! (With apologies to Shoeless Joe from "Field of Dreams" starring Kevin Costner).....
no songs in that film were there Ivan ? :cheesy:
Best wishes
Ivan
