Best Thread Correlation Trading - Basic Ideas and Strategies

[GMP]

JRP ? JRP ? are you there............weve found someone naive enough to send us some money.......

Seriously GMP for what you will end up with from us...we may have to pay you

this may take a while as i'm a little pushed at the moment so will hack what I have as soon as I can
N

Thanks in advance - no hurry whatsoever.
I've just been playing with your standard corrie and I'm not quite sure what I'm looking at. Is this an RSI value derived from every pair that currency features in (or at least the ones that your MT4 feed supplies)? Or just some specific pairs?
Also, how do I remove the currencies I'm not interested in?
Looks like the same principle though... I'm just more focused on specific pairs than general strength.

Crikey, can my Quest finally be nearing an end!?

 

[GMP]

Me again (I'm not usually this pesky),
having looked at your corrie indicator properly, if it's a whole lot easier to just change the RSI code to CCI, and not have the option of selecting specific pairs, that'd be fine by me. The values this one uses look pretty good and probably iron out the individual spikes you can get in a single pair.
The more I look at this, the more impressed I am! If only I could delete the ones I don't want, it would save on the paracetemol

 

[NVP]

Thanks in advance - no hurry whatsoever.
I've just been playing with your standard corrie and I'm not quite sure what I'm looking at. Is this an RSI value derived from every pair that currency features in (or at least the ones that your MT4 feed supplies)? Or just some specific pairs?
Also, how do I remove the currencies I'm not interested in?
Looks like the same principle though... I'm just more focused on specific pairs than general strength.

Crikey, can my Quest finally be nearing an end!?

hey mate

I know you dont want to here this but brew some coffee and start at the start of this thread.....some times it gets lightweight and you can fastforwardf through....other times you will see something that promotes more research and it will slow down

at the end lets see if we can help you more re what youre lookign for or perhaps you will find it here :smart:

without being big headed we didnt get on the best thread list for nothing.....

(well theres the blackmail photos we have of all the T2W moderators who attended JRP's Karen Brady's transvestite party but thats another matter............ )

re hiding the lines i'd recommend clicking around with the Edit indicator mode (when loaded on chart) as you then get to adjust or hide whatever you want....this may be in the tghread somewher I cant remember ......I was a 5 year old boy in shorts when this all first kicked off back in the stone age :whistling

N

 

[NVP]

mornin all..........

jees cant wait for some weekend R&R.....

markets generally up overnight......gold faltering as we speak.....

in truth the TAG was certainly not as bearish as it should have been so I would look for some good tag buying (G6 selling) opportunities if markets tank more in morning session

on the far right maybe GBP's climb may be halted today ?


its NFP's today so JRP gets excited a lot......(its his age !)

for us more earthbound creatures its time for work.....
N

 

[NVP]

heres the markets vs USD in last 2weeks

see how they they've been doing ok and USD has been generally waning....but
not exactly colapsing right ?

if theres some major unwinds today (Friday Friday) the usd will fly...dumping the G6 in the process
and who was it again that I thought had been doing ok this week......:whistling

and....NFP's will add to the general confusion later

Glad i'm not a trader....:whistling
N

 

[GMP]

Re: FX Correlator

Well, seeing as nothing's happening until the NFP s'afternoon, I've been farting about a bit more with your FX Correlator and reading through some of the thread and I'm just as impressed with it as I was yesterday.
Forget my request about applying any CCI maths to it (hope you haven't started!). As someone wiser than me pointed out, my entries & exits already rest on CCI - this indicator using different maths is an ideal way of confirming them from a slightly different perspective instead of relying wholly on one formula.
And that's how it looks to me - a really good adjunct to anyone's setup.
I'm not sure I'd use it the way you seem to have been in the thread, as I'm more focused on 3 particular pairs, but there's obviously several ways of using it depending on your needs. You guys must have been profiting from it the last few months?

One thing this thread really needs though is a FAQ!

 

[jrplimited]

Hi N and all the hidden ones,

Its Friday; its NFP day and its nearly the weekend - yipeee! Well, yipeee apart from the NFP thing as this always has me popping at half normal values.... Here is what I saw this morning:-

GU; First trade entered long at 50356 on 08:10 bar, price moved down slightly with some tall wicked bars then it moved back upwards, back downwards again to near local low but higher base, got an injection of momentum to form a lower high then someone hit reverse gear by mistake and down it went to print a local low, mistake reversed and off it went to print local high which was enough to move SL up to BE and this tight ranging market took that out on 09:25 bar for zilch. Second trade sell stop at 50307 filled by 10:10 bar, price moved down then up and did this small ranging see-saw action until my time criteria closed out on 12:00 bar for 6 pip loss - lucky for me there as market suddenly seemed to wake up after midday!

EU; First trade opened short on 08:30 bar and two bars later SL taken out for 18 pip loss. Second trade opened long at 35926 on 08:40 bar and price dipped down before running up to make local high, then it went into an up down pattern for ages forming a base just below entry point. Patience ran out with this trade so closed off after 11:20 bar for 8 pip loss.

EG; Having watched this pair for an hour at the session start, decision to simply close chart was easily reached! Like yesterday this was another basket case so left well alone.

Absolute rubbish morning session for me so I might just look for decent setups after the dreaded data release this afternoon to see if the week can end on something better - trade well and regards,
Simon.

 

[NVP]

Re: FX Correlator

Well, seeing as nothing's happening until the NFP s'afternoon, I've been farting about a bit more with your FX Correlator and reading through some of the thread and I'm just as impressed with it as I was yesterday.
Forget my request about applying any CCI maths to it (hope you haven't started!). As someone wiser than me pointed out, my entries & exits already rest on CCI - this indicator using different maths is an ideal way of confirming them from a slightly different perspective instead of relying wholly on one formula.
And that's how it looks to me - a really good adjunct to anyone's setup.
I'm not sure I'd use it the way you seem to have been in the thread, as I'm more focused on 3 particular pairs, but there's obviously several ways of using it depending on your needs. You guys must have been profiting from it the last few months?

One thing this thread really needs though is a FAQ!

Thanks for kind input GMP.....keep asking any questions as we dont get much feedback here - just lots of viewers who I guess just observe and use it

yep a FAQ or even a seperate Thread summarising the drivel would be a good idea

even better would be that the person who started this thread (moi) actually had more time to contribute to it..........still working on that mission

N

 

[GMP]

Re: FX Correlator

Thanks for kind input GMP.....keep asking any questions as we dont get much feedback here - just lots of viewers who I guess just observe and use it

yep a FAQ or even a seperate Thread summarising the drivel would be a good idea

even better would be that the person who started this thread (moi) actually had more time to contribute to it..........still working on that mission

N

Yep, time & money are the two things we never seem to have enough of.
Seeing the NFP reaction earlier, would you have had any way of using the Correlator to suggest the extreme weakness in the Yen before it happened? I think most of it was down to institutions waiting for the figures before acting on the change in 3m Libor rates yesterday (US overtaking Japan) (which I didn't notice) but if the Correlator could pick up on that sort of thing, it'd save lazy gits like me keeping up to speed on the financial news!

 

[GMP]

Hi N and all the hidden ones,

Its Friday; its NFP day and its nearly the weekend - yipeee! Well, yipeee apart from the NFP thing as this always has me popping at half normal values.... Here is what I saw this morning:-

GU; First trade entered long at 50356 on 08:10 bar, price moved down slightly with some tall wicked bars then it moved back upwards, back downwards again to near local low but higher base, got an injection of momentum to form a lower high then someone hit reverse gear by mistake and down it went to print a local low, mistake reversed and off it went to print local high which was enough to move SL up to BE and this tight ranging market took that out on 09:25 bar for zilch. Second trade sell stop at 50307 filled by 10:10 bar, price moved down then up and did this small ranging see-saw action until my time criteria closed out on 12:00 bar for 6 pip loss - lucky for me there as market suddenly seemed to wake up after midday!

EU; First trade opened short on 08:30 bar and two bars later SL taken out for 18 pip loss. Second trade opened long at 35926 on 08:40 bar and price dipped down before running up to make local high, then it went into an up down pattern for ages forming a base just below entry point. Patience ran out with this trade so closed off after 11:20 bar for 8 pip loss.

EG; Having watched this pair for an hour at the session start, decision to simply close chart was easily reached! Like yesterday this was another basket case so left well alone.

Absolute rubbish morning session for me so I might just look for decent setups after the dreaded data release this afternoon to see if the week can end on something better - trade well and regards,
Simon.

Hi Simon
You could possibly have used the Correlator to stay out of the $ markets this morning. If I manage to attach a pic, it looks to me like it indicates a sideways market when your target currencies stay within +0.00005/-0.00005 on a 5min timeframe. The settings here are 50 & 1, with €,$ & £ showing.
The 0.00018 levels also look significant but I've only been playing with it for a day so I could well be spouting bullsh*t here... (apologies if this is old hat - I haven't read every last page of the thread)

[the time looks wrong because my data provider is an hour in front of UK time]

 

[NVP]

Re: FX Correlator

Yep, time & money are the two things we never seem to have enough of.
Seeing the NFP reaction earlier, would you have had any way of using the Correlator to suggest the extreme weakness in the Yen before it happened? I think most of it was down to institutions waiting for the figures before acting on the change in 3m Libor rates yesterday (US overtaking Japan) (which I didn't notice) but if the Correlator could pick up on that sort of thing, it'd save lazy gits like me keeping up to speed on the financial news!

Hey all

nearly end of the week......

heres my take on this but its all hindsight and you all know me by now so this could not mean a thing !

heres some of our correlation 101 rules........

1) Gold inverts to USD direction (usually)
2) Dow30 inverts to Yen direction (usually)
3) USD correlates 90%+ to Yen directionally (usually)

so always look for clues when these areas are correlating together or alternatively when something breaks down as it can generate potentially profitlable situations....

heres the 1min action leading up to 13.30pm when all hell broke loose.........see how Yen started weakening when everything else was pointing to a continuing positive scenario ?

and then the news and then el collapso (Euro and GBP fell as well)

or is it all hocus pocus ?....................everyone knows I dont advise on trading the U/J because of their strong correlation but thats not to say it cannot be done ......cos it can

N

 

[NVP]

Hi Simon
You could possibly have used the Correlator to stay out of the $ markets this morning. If I manage to attach a pic, it looks to me like it indicates a sideways market when your target currencies stay within +0.00005/-0.00005 on a 5min timeframe. The settings here are 50 & 1, with €,$ & £ showing.
The 0.00018 levels also look significant but I've only been playing with it for a day so I could well be spouting bullsh*t here... (apologies if this is old hat - I haven't read every last page of the thread)

[the time looks wrong because my data provider is an hour in front of UK time]

GMP - excellent !....you are using horizontal value guides on your Corries

everyone i'm a little more of a maverick re this....but you should use these if possible as the charts do reset a lot regarding sizing so having the horiz lines in will maintain your perception of the true movements that are happening re relative prices

beware of what MA setting and Delta settings you use though remembering that the higher the MA setting the more difficult it is for a price to continue to diverge away from the zero line.....thats why I use a 1000/1 for more pure price movements

N

 

[GMP]

Re: FX Correlator

Hey all

nearly end of the week......

heres my take on this but its all hindsight and you all know me by now so this could not mean a thing !

heres some of our correlation 101 rules........

1) Gold inverts to USD direction (usually)
2) Dow30 inverts to Yen direction (usually)
3) USD correlates 90%+ to Yen directionally (usually)

so always look for clues when these areas are correlating together or alternatively when something breaks down as it can generate potentially profitlable situations....

heres the 1min action leading up to 13.30pm when all hell broke loose.........see how Yen started weakening when everything else was pointing to a continuing positive scenario ?

and then the news and then el collapso (Euro and GBP fell as well)

or is it all hocus pocus ?....................everyone knows I dont advise on trading the U/J because of their strong correlation but thats not to say it cannot be done ......cos it can

N

I think the initial drop in € & £ vs. the $ was market re-adjustment - those two clobbered the Yen too. I guess the best indication of what was about to happen was the Yen being the weakest of the four... so the most logical one to sell. Would've helped me avoid the reversal in cable & €$.
Fascinating - it definitely helps with the bigger picture, doesn't it?

 

[GMP]

GMP - excellent !....you are using horizontal value guides on your Corries

everyone i'm a little more of a maverick re this....but you should use these if possible as the charts do reset a lot regarding sizing so having the horiz lines in will maintain your perception of the true movements that are happening re relative prices

beware of what MA setting and Delta settings you use though remembering that the higher the MA setting the more difficult it is for a price to continue to diverge away from the zero line.....thats why I use a 1000/1 for more pure price movements

N

Yeah, I should've said there I'm using a fixed max/min scale to compare the indicator across different pairs.

 

[NVP]

Re: FX Correlator

I think the initial drop in € & £ vs. the $ was market re-adjustment - those two clobbered the Yen too. I guess the best indication of what was about to happen was the Yen being the weakest of the four... so the most logical one to sell. Would've helped me avoid the reversal in cable & €$.
Fascinating - it definitely helps with the bigger picture, doesn't it?

Hi GMP

its nice when someone jumps on board the thread and gets it ......

this indicator is not the holy grail but if you want to see whats really going on across the G8 (from 1m to Dailys) this is the critter..... !

N

 

[jrplimited]

Re: FX Correlator

Hey all

nearly end of the week......

heres my take on this but its all hindsight and you all know me by now so this could not mean a thing !

heres the 1min action leading up to 13.30pm when all hell broke loose.........see how Yen started weakening when everything else was pointing to a continuing positive scenario ?

and then the news and then el collapso (Euro and GBP fell as well)

N

Hi N and GMB,

Hmmm.... Different take than me there this afternoon. I waited for an hour after the NFP carnage and then set myself a precedent of only taking a good confirmed flag from GU chart.

That meant waiting until 15:20 bar closed and then entering long at 50438 on 15:25 bar, following price action upwards and then letting 16:40 bar take out TS for 81 pip profit.

Shame I was only on reduced pop but hey-ho, it ended the week well!

Enjoy the weekend and regards,
Simon.

 

[NVP]

Re: FX Correlator

Hi N and GMB,

Hmmm.... Different take than me there this afternoon. I waited for an hour after the NFP carnage and then set myself a precedent of only taking a good confirmed flag from GU chart.

That meant waiting until 15:20 bar closed and then entering long at 50438 on 15:25 bar, following price action upwards and then letting 16:40 bar take out TS for 81 pip profit.

Shame I was only on reduced pop but hey-ho, it ended the week well!

Enjoy the weekend and regards,
Simon.

just the 81 pips ?......you're slipping simon....

N

 

[NVP]

mornin all......chilly one

markets rocked in the cold night.....Gold , Dow , Nikkei all having fun....tag rose as well though.....

im not surprised that USD is showing such strength as its had some decent news releases last week.....but Yen should have lost more overnight...expecially as its just become the number 1 carry trade currency again again after its 3m interbank rates went below the USD

so no tag market correlation at present everyone for me so If I were trading I would wait for a little more confluence.......

if markets take a breath .....sure buy tag against eurozone....gbp looks weakest at present (surprise surprise )

diary-wise its quietish...

and...be careful out there ! :smart:
N

 

[NVP]

have to admit I havent looked at this yet but I do like informal approaches to teaching/learning so see what you think........:smart:

if you have seen any forex stuff out there in the cosmos that is fun and informative.....drop it on this thread please......

N

 

[NVP]

in fact that gives me an idea for finally launching my Youtube corrie video series.....hmmmmmm :smart:

N