Best Thread Correlation Trading - Basic Ideas and Strategies

[WklyOptions]

Hi, NVP,

Been plugging thru the posts and reading the comments on this thread.

I use Correlations primarily for the forex marketplace - using the Correlation charts from the Complete Currency Trader website/methodology.

Once I track the strongest and most stable Correlation(s) across the higher time frames, I then begin to look at the various pairs to identify pull-backs that are setting up against the dominant major trend(s).

Then I use smaller time frames to enter in the direction of the dominant trend.

I know - nothing original - and well used and described by you and the other forex experts here in T2W.

But still - my point is that in using both:

1. The strongest and most stable Correlated pairs
2. Multiple time frames to isolate and exploit pullbacks

The win-rate has been fantastic. I am a strong proponent of high win accuracy. I know the "holy grail" is really getting a high profit ratio (avg win vs avg loss ratio) of > 2.0 to 1.

But I have found that most traders suffer some degree of "ego" erosion if they lose 3-4 in a row! And even worse, like lose 3, win 1, lose 4, win 2, lose 3,....

As you know well - it is very possible to achieve high win rates (and also high profit ratios per trade). Requires a bit more work, more patience, and MORE PRECISION/SELECTIVITY of picking only the very best setups.

I'll try to post my next forex trade here on this thread if it's ok w u. My trades are usually off the H1 and H4 setups.

Thanks for keeping excellent dialog and forex commentaries/observations. Keep on sharing and teaching!

WklyOptions

 

[NVP]

yep - CHF and Euro have put more nice pips on the board in last hour or so

I see the E/U got to 3646...........not bad at all ....

USD flatlining as the europeans struggle to all stay above the zero

later
N

 

[NVP]

Hi, NVP,

Been plugging thru the posts and reading the comments on this thread.

I use Correlations primarily for the forex marketplace - using the Correlation charts from the Complete Currency Trader website/methodology.

Once I track the strongest and most stable Correlation(s) across the higher time frames, I then begin to look at the various pairs to identify pull-backs that are setting up against the dominant major trend(s).

Then I use smaller time frames to enter in the direction of the dominant trend.

I know - nothing original - and well used and described by you and the other forex experts here in T2W.

But still - my point is that in using both:

1. The strongest and most stable Correlated pairs
2. Multiple time frames to isolate and exploit pullbacks

The win-rate has been fantastic. I am a strong proponent of high win accuracy. I know the "holy grail" is really getting a high profit ratio (avg win vs avg loss ratio) of > 2.0 to 1.

But I have found that most traders suffer some degree of "ego" erosion if they lose 3-4 in a row! And even worse, like lose 3, win 1, lose 4, win 2, lose 3,....

As you know well - it is very possible to achieve high win rates (and also high profit ratios per trade). Requires a bit more work, more patience, and MORE PRECISION/SELECTIVITY of picking only the very best setups.

I'll try to post my next forex trade here on this thread if it's ok w u. My trades are usually off the H1 and H4 setups.

Thanks for keeping excellent dialog and forex commentaries/observations. Keep on sharing and teaching!

WklyOptions

Hey there W

please be my guest ................my Wingman Jedster has had to focus back on his City Trader Quant/programming work so I'm happy for any input here

it gets lonely ! :smart:
N

 

[Forexmospherian]

Morning N

Could be a busy next 3 days with lots of news going on

Looking forward to Freaky Friday - but hope its not a big anti climax

Have a good day

Regards


F

 

[NVP]

Hi, NVP,

Been plugging thru the posts and reading the comments on this thread.

I use Correlations primarily for the forex marketplace - using the Correlation charts from the Complete Currency Trader website/methodology.....i'll take a look

Once I track the strongest and most stable Define stable ?) Correlation(s) across the higher time frames, I then begin to look at the various pairs to identify pull-backs that are setting up against the dominant major trend(s).

Then I use smaller time frames to enter in the direction of the dominant trend.

I know - nothing original - and well used and described by you and the other forex experts here in T2W.

But still - my point is that in using both:

1. The strongest and most stable Correlated pairs...(perhaps use individual currencies ?)

2. Multiple time frames to isolate and exploit pullbacks....Abolutely !!

The win-rate has been fantastic. I am a strong proponent of high win accuracy. I know the "holy grail" is really getting a high profit ratio (avg win vs avg loss ratio) of > 2.0 to 1.....the holy grail is making money dude ..full stop !


But I have found that most traders suffer some degree of "ego" erosion if they lose 3-4 in a row! And even worse, like lose 3, win 1, lose 4, win 2, lose 3,....yep simple probability ...even a good win rate generates bad runs


As you know well - it is very possible to achieve high win rates (and also high profit ratios per trade). Requires a bit more work, more patience, and MORE PRECISION/SELECTIVITY of picking only the very best setups..........agreed and in truth my flaw ...as a very part time Trader I have to trade when convenient for me and thats not necesssarily when the market is offering its best high % trading opportunities !


I'll try to post my next forex trade here on this thread if it's ok w u. My trades are usually off the H1 and H4 setups.

Thanks for keeping excellent dialog and forex commentaries/observations. Keep on sharing and teaching!

WklyOptions

see in red above

 

[NVP]

busy today ..............perhaps some screentime much later tonight

 

[NVP]

Morning N

Could be a busy next 3 days with lots of news going on

Looking forward to Freaky Friday - but hope its not a big anti climax

Have a good day

Regards


F

Hey F

freaky week alright.........I should be able to get amongst it more tommorow / friday

good hunting
N

 

[NVP]

hey all

on the 1hr TF 20ma I see a nicely swinging USD ...........up then down .......a little whippy in last few hours but sells nonetheless.........

NZD was the buy over last few hours ................europeans are net bear ..............lets see if that holds during london morning session

N

 

[NVP]

a lot of convergence at moment ..........

I like the CAD as a potential buy but need to see some evidence its ready to move again........ similarly Euro sells could be a nice play ...........I need to see more


USD is a sell as already noted in last post.............but not this hour so far

later :smart:
N

 

[Forexmospherian]

This last hour as been one of the slowest I have seen at this time of the day for years. Will the action not start to after Midday UK time ?

 

[Forexmospherian]

EJ - EU and GU all seem to be turning atm - out scalp buys for now

 

[NVP]

a lot of convergence at moment ..........

I like the CAD as a potential buy but need to see some evidence its ready to move again........ similarly Euro sells could be a nice play ...........I need to see more


USD is a sell as already noted in last post.............but not this hour so far

later :smart:
N

hmmm.........eurosells were the play eventually :smart:

USD gone bull

N

 

[NVP]

EJ - EU and GU all seem to be turning atm - out scalp buys for now

well it cetainly warmed up a little after this

 

[NVP]

and yet another fake and bake from the USD ...........cutting south again !!

make your mind up man !!!

N

 

[NVP]

morning all

consolidation phase overnight ...............none of the G8 were looking to diverge

lets see what NFP day brings

N

 

[NVP]

CAD sells look interesting ...........Ucad buys i'm watching

 

[NVP]

buy gu 6810

 

[NVP]

sorry it came came from nowhere

 

[NVP]

i will get to b/e quiclly here - not givin up pips

 

[NVP]

out already .............that was opputunistic scalp against the play so wasnt hopefull

N