Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

holy corrie graily thingy.........

moderators......how do I delete that post ?

I cant believe it......my secret is out.......JRP was right .......I should have kept it secret for me to generate eternal riches forever...........what am I to do......the trading world will end tonight with this secret out.......Soros i'm sorry............

People will have independent income streams and be financially secure forever.....free to walk along beaches together like the picture below...........until their bladders or thirst drive them home........We will run out of beach space for god sake !!

what have I done ?.........all those marketeers out there making money from peoples dreams and amibitions....i'm eternally sorry but it had to be said...........

N

 

[NVP]

wake up wake up dorothy its time to return to plannet earth....

seriously - if you run MA crossover trading systems.... put your higher MA in the MA setting and put your faster(lower) MA in the Delta setting of corrie

each time a currency crosses the Zero line thats the fast ma crossing the slow ma for the individual currency and indicating the new direction to trade it......

then go find a currency thats crossing in opposite direction recently and thats a good pair to trade

Remember this system indicates the future bias......dont just pile in regardless.....make some price action decisions as sometimes the pairing could be a little overbought or oversold and need to draw breath
before continuing ...........if you want to make really ballsy calls - pick one currency as above and chose another that is just turning from a high or low and returning towards the zero.......

and if you like juggling knives as a hobby.....trade both currencies returning towards zero from highs.....(ooo thats retrace central and gets you in before the pair even realises itself that its changing trend !)

if you dont have the first idea what to trade.... use 50/20 on any TF as its as good as any and those MA crossovers are eternally recognised in the trading world........

if you classify stamp collecting as an adrenaline sport may I recommend 200/50 instead as a combo...........:whistling

this info has been on the thread before but god knows where it is now......it feels like man was still hunting dinosaur when I made that first post :innocent:

I am serious re above.....it kicks butt on any TF and doesnt cost $1997.00

heres the 50/20 corrie on the 5m chart today...go test it.....

later dudes
N
ps - (there is no holy grail)

 

[NVP]

oh you want jam on it...........!!!!

ok 5m TF calls right now .....totally ignoring the other markets

Euro and CHF are solid sells
GBP more risky sell as still above zero line

no solid buys yet.....and that CAD ship sailed a long time back !
usd is turning up though isnt it ?
the light blue NZD is a higher risk buy.....shame about he spreads vs this currency

remember what I said about bias only.....wait for some price action to get you in....dont go in
when the pair chosen is clearly going to retrace a little (everything retraces)....

everyone feel free to give me grief later re what happens..........i'm going for a walk on the nearest beach before it gets tooooo crowded later on

N

 

[NVP]

just got my latest newsletter from lance beggs....a great trader and a great guy

yourtradingcoach.com

He helped me a lot last year when I was really battling with my correlation ideas and how to take the corrie forward.........I was also just getting back into the trading arena so got some great advice at the time from a person I really respect

hes a price action maestro and I recommend you have a trawl around that growing FREE
site he runs.......

good video from Will smith this week + a timely reminder to me below to stop looking for (front foot aggressive) breakouts so much when allowing a little retrace before entry can get you into b/e much more often......(backfoot trading)

also note below regarding my comments on using the 50/20 discussed yesterday....
(or any double ma usage of the corrie instead of delta set on 1).....dont jump when the pice runs......let it retrace a little before going in.....

"One of the very few scientifically proven facts about the markets is that prices oscillate above and below value. You could say that markets are manic depressive - rising too high and falling too low, only to swing back.

There are several types of channels, and my favorite is a straight envelope - the lines above and below the EMA, both parallel to it. A well-drawn channel fits like a good shirt, covering the body of prices, with only the most extreme prices - the neck and the wrists - sticking out. Amateurs love to buy breakouts, but professionals tend to look for buying opportunities near the lower channel line and shorting opportunities near the upper channel line."

... Dr. Alexander Elder, "Entries & Exits"


easier said than done though.......and the first G/U that goes off to 30 pips before even blinking will have your finger back on the trigger immediately ! :whistling

N

 

[NVP]

oh you want jam on it...........!!!!

ok 5m TF calls right now .....totally ignoring the other markets

Euro and CHF are solid sells
GBP more risky sell as still above zero line

no solid buys yet.....and that CAD ship sailed a long time back !
usd is turning up though isnt it ?
the light blue NZD is a higher risk buy.....shame about he spreads vs this currency

remember what I said about bias only.....wait for some price action to get you in....dont go in
when the pair chosen is clearly going to retrace a little (everything retraces)....

everyone feel free to give me grief later re what happens..........i'm going for a walk on the nearest beach before it gets tooooo crowded later on

N

all that balony from me yesterday re calling those trades was perfect in its message as Euro and CHF moved up the moment I said look to sell them !


but remember what I also said re price action and using confirmation before entering the bias signals being given on the 50/20.....

Euro never really continued its downward path in p/a terms (eg E/U ) after I called it..........instead within an hour or so it was above the zero on the 50/20 and usd was turning downwards already below the Zero.......so guess what.... wait for some p/a confimation and buy E/U instread !

and that one went forever

N

there is no holy grail

 

[jrplimited]

Hi N,

Interesting stuff there so thanks for this on behalf of everyone who "lurks" around here!

In my very humble (and so often wrong!) opinion trading the markets last week was a real dogs dinner and personally I was relieved to grab a few pipadoolies in the end, as around mid week I was expecting a significant loss or, at best, near BE as an end game's result. We both have discussed that "de-linking" of normal corrie behaviour on the fab three and I guess this will remain so until all current economic problems mince themselves out of the closet and into the open.

One key element you might want to consider whilst these economic woes keep coming out is any main financial instrument within the bond markets. With the USA announcing last week's surprise raising of inter bank rates (not the key Fed rate) we are seeing the first major economy's attempts to halt their support of financial systems - following that of course will be attempts to try and claw back some of the enormous amount of emergency funds expended.... Food for thought.

I'm still heavily biased towards any short trades flagged and very wary of long trades, as the markets are still going down far faster than when they attempt to rise (this can be seen on lower time frames where down spike bars are far more prevalent than up spike bars) and it wouldnt surprise me to see a few major "shocks" over the short term which will hit the already weak and nervous confidence behind some of the past rises in major stock indices.

My strategy to deal with all that? Shimples; wear a hard hat, have a loose SL on short trades, a tight SL on long trades, endeavour to spend less time in the markets so reducing exposure and have copious amounts of spare trousers to hand!

Enjoy the weekend and best regards,
Simon.

 

[NVP]

Hi N,

Interesting stuff there so thanks for this on behalf of everyone who "lurks" around here!

In my very humble (and so often wrong!) opinion trading the markets last week was a real dogs dinner and personally I was relieved to grab a few pipadoolies in the end, as around mid week I was expecting a significant loss or, at best, near BE as an end game's result. We both have discussed that "de-linking" of normal corrie behaviour on the fab three and I guess this will remain so until all current economic problems mince themselves out of the closet and into the open.

One key element you might want to consider whilst these economic woes keep coming out is any main financial instrument within the bond markets. With the USA announcing last week's surprise raising of inter bank rates (not the key Fed rate) we are seeing the first major economy's attempts to halt their support of financial systems - following that of course will be attempts to try and claw back some of the enormous amount of emergency funds expended.... Food for thought.

I'm still heavily biased towards any short trades flagged and very wary of long trades, as the markets are still going down far faster than when they attempt to rise (this can be seen on lower time frames where down spike bars are far more prevalent than up spike bars) and it wouldnt surprise me to see a few major "shocks" over the short term which will hit the already weak and nervous confidence behind some of the past rises in major stock indices.

My strategy to deal with all that? Shimples; wear a hard hat, have a loose SL on short trades, a tight SL on long trades, endeavour to spend less time in the markets so reducing exposure and have copious amounts of spare trousers to hand!

Enjoy the weekend and best regards,
Simon.

thanks Simon............very interesting..........does that mean you still trade the indexes ?

http://www.moneyweek.com/news-and-c...r&utm_medium=email&utm_campaign=Money+Morning


Gonna be interesting to see what the US do next in this stealth attack on its economy........and of course the new game show that everyone is playing called "the weakest Eurolink" where each country stands in front of ms Robinson and answers questions on how they got their country into such a bloody mess.....Greece being the star guest............and stop shouting bank for gods sake !

 

[NVP]

the ole 1 - 2..........

interesting....

JRP.........as resident gunslinger on the thread have you ever used multiple entry trading methods ?

I know you dumb down your daily reports re what you are actually doing for us humble mortals here (tee hee)


N

 

[NVP]

still sifting thru inbox......

i like these guys....I have to reach for the old reference books and investopedia on every issue.....now lets look up stuff on repos....!

they dont like the euro do they !

N

 

[NVP]

Sure......Euro has been bad recently........4h chart 1 below

but putting things into perspective........Daily chart 2 below

not exactly in the scale of the GBP debarcle in 2008 is it !!

N
and before you ask.....the recent fall of Euro vs that sizable Eurofall in 2008 (preceding the GBP collapse) equates to ONLY around 2/3 or 65% so far............hmmm !

gotta say that if GBP stays out of mischief in next few weeks and markets stay bearish......what else will there be to sell but the Euro ?

 

[NVP]

Re: Gold verses the g8

ok just one quick observation !

heres an interesting corrie hybrid chart.....It shows me how Gold is doing against the G8 currency basket

its a 1000/1 setting so relatively unaffected by moving average distortions and is useful sometimes to me.....

Remember I have shown other gold charts with gold as part of the G8 (like a G9 corrie) and that is a different chart .......as it always shows gold going up and USD going down (and vice versa) etc etc ......

this chart factors all that malarky in and assumes that the G8 is valued as a weighted basket that always equates to a flat line price......(neutral)....

therefore when gold is rising it is being respected more than holding any G8 currency (not just USD or GBP etc etc) and is to be respected as such

so what do we see on this daily 1000/1 setting ?.......well surprise surprise the current overheated printing presses of the G8 world combined with cavenous deficits and lack of any real world business stimulus mean 1 thing.......the G8 is depreciating in real terms to gold....so buy gold in a weighted basket of currencies as it is indicating (if the trend continues) that you will do well this year and perhaps beyond....

no surprises there then :whistling

N

damn...

i was going to ramble about gold relative to G8.....but ive lost the indicator i built !!**??


DOH !.......where is it ? :whistling

N

 

[jrplimited]

the ole 1 - 2..........

interesting....

JRP.........as resident gunslinger on the thread have you ever used multiple entry trading methods ?

I know you dumb down your daily reports re what you are actually doing for us humble mortals here (tee hee)


N

Hi N,

Great video there. Personally I dont "drop" any partial lots for lock-in profit and then move SL to BE and let remaining run etc, as when monitoring two or three pairs this can be an extra task that really shouldnt be done - ie either focus on trading three pairs OR focus on one pair with snazzy techniques.

I use to do this method when trading futures (YM mini DOW contract) but had to be careful that when moving to BE I didnt "strangle" price movement - in other words not allowing enough room for price to breathe. I much prefer to trade flat on FX by treating lots placed as a pure single trade and exit all when either SL hit or TS taken out when catching an intra day move, yes it would be fairly simple to set up some scripts in MT4 which could be used for partial closes but thats not really my style.

Another point to think about is that when an intra day trend in FX is found it will usually be quite a good one with fairly smooth characteristics once established, unlike futures behaviour.

As you know I like simplicity and am a firm believer in the KISS principals whenever trading, however the concepts shown in that video can be very workable if you can get them right. Things to watch are five decimal places and errors these can cause (especially for me!) in the heat of the battle, not pullling BE to close to price action so a stop out happens right before the next burst of movement (how frustrating that can be!) and remembering that the portion of a trade left to run has to be divided by its proportion of the whole trade - ie 50% left to run is divided by two - when doing your daily trading sheet journal.

I'm going to be missing tomorrow morning's bun fight due to visiting an aunt who is on her last legs so good luck for the session - regards,
Simon.

 

[NVP]

Hi N,

Great video there. Personally I dont "drop" any partial lots for lock-in profit and then move SL to BE and let remaining run etc, as when monitoring two or three pairs this can be an extra task that really shouldnt be done - ie either focus on trading three pairs OR focus on one pair with snazzy techniques.

I use to do this method when trading futures (YM mini DOW contract) but had to be careful that when moving to BE I didnt "strangle" price movement - in other words not allowing enough room for price to breathe. I much prefer to trade flat on FX by treating lots placed as a pure single trade and exit all when either SL hit or TS taken out when catching an intra day move, yes it would be fairly simple to set up some scripts in MT4 which could be used for partial closes but thats not really my style.

Another point to think about is that when an intra day trend in FX is found it will usually be quite a good one with fairly smooth characteristics once established, unlike futures behaviour.

As you know I like simplicity and am a firm believer in the KISS principals whenever trading, however the concepts shown in that video can be very workable if you can get them right. Things to watch are five decimal places and errors these can cause (especially for me!) in the heat of the battle, not pullling BE to close to price action so a stop out happens right before the next burst of movement (how frustrating that can be!) and remembering that the portion of a trade left to run has to be divided by its proportion of the whole trade - ie 50% left to run is divided by two - when doing your daily trading sheet journal.

I'm going to be missing tomorrow morning's bun fight due to visiting an aunt who is on her last legs so good luck for the session - regards,
Simon.

hi mate..............wise words and I figured that multiple dodars would be difficult in your style....especially when theres also the contra-ing element that could be in play if E and G are doing different things......

I love that trailing style you use re entering.....and clearly it does relatively well in most trading environments.....

Sorry to hear about your Aunt
N

 

[NVP]

mornin all......

quiet night in the trenches.....not much to say really

usual advice.....watch the o/n breaches on the 5m 1000/1 corrie ....although that will not be difficult today !

N

 

[NVP]

dont look to the economic news for any fun either...........

 

[NVP]

hi all............

hope you are all enjoying the fun.........

tag on balance are being pressurised generally upwards so far on choppy markets......euro is the most exposed as you are probably seeing getting no relief from GBP as well so if the markets really start falling its Sell E/U and possibly Sell E/G as well but remember the E and G are the dogs at present in the G8....

No FT - no comment - no Euro !
http://www.ft.com/cms/s/0/88790e8e-1f16-11df-9584-00144feab49a.html

N

 

[NVP]

Second tier EURO currency ?

what makes me laugh about the Euro is everyone worries if the pigs default blah blah......but let me put this big family squabble another way .....theres really only 1 country that matters in the euro Zone and thats Germany....how long will their people suffer this rediculous farce where they have to suffer continued austerity to bail out irresponsible partners that they care absolutely nothing about ? (well apart from some holiday sunshine every now and again)

If the Uk were in this position....how long would we hold the line ?

I think that Deutschemark II is still probably still unthinkable....BUT a second Tier Euro could be a solution here in the long term.........whos in which remains to be seen but it makes sense to me as the strugglers get to devalue their currency which could solve a lot of issues over next few years........they behave they get to play in the premier again.......and if you dont behave you get religated....shimples !

The Euro's 1 size fits all is not working and will bury the weaker countries.....

oh yeah and we all get another currency to trade....horrah !!!!

N

 

[NVP]

heres the latest...............

sorry but megabusy again today so screentime is difficult + JRP was out on family business as you know.....

glad we were by the look of this mess........

Things stayed pretty much as I called them at 9am this morning (as no major eurozone news to create some action).....

if markets stage a late rally then USD should be ripe to fall....as thats its hidden bias currently

later...........
N

 

[praveenk]

thanks for the useful info.can i get some advice on online trading platforms?

 

[NVP]

mornin all........

a little more action overnight finally and a game of 2 halves.......

first half was a continued downward market bias (which the Nikkei embraced as well)
drivng tag up.....but all this into a very choppy Europair

Note - when this happens the only "tribe" left to sell are the Comdols that all sold off in the first half of the night (not shown - NZD/AUD/CAD) :smart:

Then from about 3.30am ish the game turned and markets up / tag down.....and the europair have obliged by rising.......

great news for a lively day coming

the overnight ranges are big so watch he 7am break for a faster signal of bias

and be careful out there !
N