Best Thread Correlation Trading - Basic Ideas and Strategies

[jrplimited]

Hi N and all,

Straight into this morning's bun fight....

GU; First trade buy stop at 51886 filled by high of 08:35 bar, price crawled sideways for eight bars then dropped down and triggered SaR on 08:30 bar close for 14 pip loss. New second trade short at 51748 and price moved down faily strongly, hit a pause on 10:10 bar then moved down again to retrace weakly for three bars at 10:35, stuttered for five bars then popped downwards again from 11:20 bar. TS taken out by high of 11:45 bar for 46 pip profit.

EU; First trade short entered at 1.36668 on 08:20 bar, price dropped slightly then rose up to around 11 pips above entry price then 09:25 down bar came to rescue and price retreated back up weakly from this but didnt have any momentum and finally gave up the ghost at 09:55 by printing new local low and went trundling off southwards. TS taken out near end of 11:00 bar for 17 pip profit, no more trades taken as that one took an age and sweaty palms to complete!

EG; Bit of a mess chart wise to start off with. First trade sell stop 90088 filled during 08:30 bar and price pushed down to new local low at 08:50 but found some support and started to drift higher so initial SL moved to BE and this was hit near close of 09:35 bar for zippo. Couldnt find another setup after this which was annoying as market definitely wanted to go upwards.

Bit of a mixed bag this morning so hopefully you will all be able to squeeze something out during this afternoon - trade well and regards,
Simon.

 

[NVP]

Hi N and all,

Straight into this morning's bun fight....

GU; First trade buy stop at 51886 filled by high of 08:35 bar, for 14 pip loss. New second trade short at 51748 and TS taken out by high of 11:45 bar for 46 pip profit.

EU; First trade short entered at 1.36668 on 08:20 bar, TS taken out near end of 11:00 bar for 17 pip profit, no more trades taken as that one took an age and sweaty palms to complete!

EG; Bit of a mess chart wise to start off with. First trade sell stop 90088 filled during 08:30 bar SL moved to BE and this was hit near close of 09:35 bar for zippo. Couldnt find another setup after this which was annoying as market definitely wanted to go upwards.

Bit of a mixed bag this morning so hopefully you will all be able to squeeze something out during this afternoon - trade well and regards,
Simon.

hmmm mixed bag indeed..heres my take on a 4 hour slab of action this morning....(markets on the right) classic correlation in the markets but you have to be nimble to step in and out at the best times.....generally sell eurotwins and buy Tag....

if you want to get more technical look at gold on the right chart leading up to the first vertical bar (its the lowest line in colour gold.....)

notice anything ?.......I do......a rising gold line but USD (green) on the left chart is relatively flat despite pressure to sell from the rising gold......sooooo.......once the gold line starts to fall (after the first vertical line) the USD is happy to start rising as thats what it clearly wants to do......capesche ?

marginal stuff but welcome to trading my friends.....50% sixth sence, 50% technical....and 50% luck

as for this afternoon...........
N

 

[NVP]

best on the 1 mins re this example......I also have other corrie hybrids monitoring the Gold USD behaviour much more closely than this

the USD had an upwards bias that was being suppressed by rising gold price (and other markets ?)

or was the falling gold price being supported by a bullish USD ??

DOH - my head hurts !
N

 

[NVP]

Thank you

Thanks from everyone at corrie HQ..whoever you all are !!! :innocent:

i think JRP looks better as Geraldine than as Karen Brady ....dont you ?

 

[NVP]

Thought for the day....

Confuciuos (Famous Chinese options trader) - he say :-


An average trading system executed efficiently and with 100% precision is better than brilliant Trading system executed shoddily........

 

[GMP]

Thought for the day....

Confuciuos (Famous Chinese options trader) - he say :-


An average trading system executed efficiently and with 100% precision is better than brilliant Trading system executed shoddily........

He also say, "Some days, everything turn out ****."
There are variant versions of FX Correlator?

 

[NVP]

He also say, "Some days, everything turn out ****."
There are variant versions of FX Correlator?

Hey GMP

really nothing to get excited about......I have many versions of basically the same thing running - just sometimes focussing on multiple MA's on key currencies plus the odd correlating market thrown in......i'm always hunting for certain intermarket relationships moving in confluence or breaking down.....

i'm not trying to be deliberately mysterious..... but lets be honest noooo-one can be expected to post or load up everything they are using thats of value on T2W !

the Basic Corrie I use day in and day out is available on this thread then watch the Yen relationship to the Dow30(or WS30 in metatrader) and the Gold relationship to the USD

I sometimes bring other markets into equation .....expectially the nikkei for overnight analysis but after that its to many cooks spoil the corrie broth

then its down to good old fashioned common sense on how the Yen and USD generally interact with the G6..... you can subdevide the G6 down further into comdol and Euro tribes if you want

I can generally call the tag direction most of the time...........finding a guaranteed G6 member to play against the Tag for other half of the pair is my main bugbear mostly

N

 

[NVP]

mornin all......

markets were flat/bearish overnight......yens most interesting as it went up verses a flat Dow30

on the far right 1 hour chart...is that a second day of pain for GBP coming ?

trade on usual signals through the morning
N

 

[NVP]

no big news (always in red) items today.....although I do follow Cheryls on off relationship with Ashley closely as it can really swing the Cable....

N

 

[GMP]

Hey GMP

really nothing to get excited about......I have many versions of basically the same thing running - just sometimes focussing on multiple MA's on key currencies plus the odd correlating market thrown in......i'm always hunting for certain intermarket relationships moving in confluence or breaking down.....

i'm not trying to be deliberately mysterious..... but lets be honest noooo-one can be expected to post or load up everything they are using thats of value on T2W !

the Basic Corrie I use day in and day out is available on this thread then watch the Yen relationship to the Dow30(or WS30 in metatrader) and the Gold relationship to the USD

I sometimes bring other markets into equation .....expectially the nikkei for overnight analysis but after that its to many cooks spoil the corrie broth

then its down to good old fashioned common sense on how the Yen and USD generally interact with the G6..... you can subdevide the G6 down further into comdol and Euro tribes if you want

I can generally call the tag direction most of the time...........finding a guaranteed G6 member to play against the Tag for other half of the pair is my main bugbear mostly

N

I see - fair enough! It's different ways of looking at the same thing I suppose, like most indicators. I've found it really useful the last couple of days in showing just how strong/weak the Yen's been. It's great - like having a new toy!:cheesy:

 

[GMP]

mornin all......

on the far right 1 hour chart...is that a second day of pain for GBP coming ?

trade on usual signals through the morning
N

The N is for Nostradamus is it? Sterling falling to fresh lows as I write...

 

[NVP]

I see - fair enough! It's different ways of looking at the same thing I suppose, like most indicators. I've found it really useful the last couple of days in showing just how strong/weak the Yen's been. It's great - like having a new toy!:cheesy:

Hi GMP

glad you like it.......I developed it from some more generic dollar based Strengthmeters that were able to show you the divergence of all other currencies to the dollar

But I wanted to see what the dollar was doing as well (up or down) in relation to the other G7 so I played around till I had a true G8 Strength meter :smart:

then I got into using the 1000/1 setting which virtually removed the distortion of the moving average....and thats my core indicator you see a lot here re real time action and can be used for traditional Price action systems (HH/HL, Sup/Res, Breakouts, Ranges etc etc)

its the most comprehensive indicator ive ever seen regarding watching the whole G8 market on any timeframe......1 click and you know whats going on from daily's to 1minute action....(see for example on the 15m 1000/1 corrie below......a child of 4 could tell you the answer)

then I utilise some simple correlation rules on the markets to add some spice to my trading decisions.......

JRP for example is a full time professional trader that has his own unique indicators and systems (he posts them here daily).....but he finds the corrie very useful as a compass to assist his core system

regards
N

 

[NVP]

this is an interesting piece by the boys......i'm not actually the biggest fan of trying to directly correlate the USD to the US stock market (although a relatively strong negative correlation should exist)....i'm more a Yen to US Stock markets (Negative) correlation with Gold to USD (negative) being much tighter for me.....

if markets keep pushing up I agree with them and see the yen happily taking all the hits for the carry trade leaving USD in its wake......(so buying a little U/J should be a nice punt if markets keep rising)

everyone seems to want the USD to rise......so its just a question of how much the markets move regarding its level of growth...if markets stall or fall it should go stratespheric.....(sell the G6 though - not yen) :smart:

as a Brit i'm struggling at the GBP comments.......but sadly no arguments from me on their conclusion and more interestingly as GBP falls and our capability to spend abroad on holidays and buying properties (remember that ?) wains due to the increase in real costs...that will actually drive people even more into diverting spend to UK holidays and other treats from the domestic market as thats all they can afford ! (so the devilish government economists get their wish)

Beam me up scotty.......sorry how much is that in Dollars ? ....forget it mate !

N

 

[NVP]

mornin all......

crazy night....

gold up , dow flat/up , Nikkei down.......

tag team flattish.......

hmm.....my moneys on a strong tag mornng - especially if markets cut some slack and gold give some ground.......sell eurozone as opportunties present....GBP still looks the whipping boy to me....

busy today so later dudes....much later...
N

 

[NVP]

heres calender...

that poor AUS result allowed NZD to gain a few pips on its mate....but AUD still strong and proud for me.....and that was a sneaky 4% rate call last week wasnt it

have a good day
N

 

[NVP]

mornin all......

crazy night....

gold up , dow flat/up , Nikkei down.......

tag team flattish.......

hmm.....my moneys on a strong tag mornng - especially if markets cut some slack and gold give some ground.......sell eurozone as opportunties present....GBP still looks the whipping boy to me....

busy today so later dudes....much later...
N

hey all !

it was already happening above - but thought i would expand the point I was making again as it extended to after 8am

N

 

[jrplimited]

Hi N and ....?

Had a day off yesterday as my aunt sadly passed away so its catch up time today then - ermm, early bath more like....

GU; Constantly being called the sick currency, GU is remarkably resilient and keeps on bouncing back to the magic 1.50 level despite last week's attacks. or thats what I thought when setting buy stop at 49458 which got filled by high of 09:10 bar. Price rose up then stalled and fell over with a bang taking out SL during 09:30 (news release) bar for 21 pip loss - think I'll stop thinking here! Second trade waited an hour then sell stop set at 48886 and filled by low of 10:40 bar, price went down then found a base on 10:50 bar and started to drift higher until taking out tighter than normal SL during 11:20 bar for 12 pip loss. Annoying here as could have executed a SaR on last trade and captured the subsequent sharp move up, but two losses on the trot means whinge only mode for me!

EU; Had to look a few times a this chart - did I mistakenly load EG instead of EU? No, it was definitely EU going absolutely nowhere in a real nothing direction - rather like the Greek soveriegn debt crisis. Left this one well alone.

EG; First trade sell stop set at 90858 and 09:15 bar filled this, price went down slightly then shot up on 09:30 bar taking out SL for 16 pip loss. Waited for an hour post spike bar, buy stop set at 91226 and filled by 10:45 bar, price drifted into sideways range around entry point then SL taken out during 11:30 bar for 12 pip loss.

Rather a nasty sort of morning for me but hopefully you will all be able to pick off those pips this afternoon - trade well and regards,
Simon.

 

[NVP]

Hi N and ....?

Had a day off yesterday as my aunt sadly passed away so its catch up time today then - ermm, early bath more like....

Simon.

Hi Simon

My deepest sympathies to you and your Family.......

Neil

 

[NVP]

Hi N and ....?

Had a day off yesterday as my aunt sadly passed away so its catch up time today then - ermm, early bath more like....

GU; set buy stop at 49458 which got filled by high of 09:10 bar for 21 pip loss - think I'll stop thinking here! Second trade waited an hour then sell stop set at 48886 and filled by low of 10:40 bar, for 12 pip loss. Annoying here as could have executed a SaR on last trade and captured the subsequent sharp move up, but two losses on the trot means whinge only mode for me!

EG; First trade sell stop set at 90858 and 09:15 bar filled this, for 16 pip loss. Waited for an hour post spike bar, buy stop set at 91226 and filled by 10:45 bar for 12 pip loss.

Rather a nasty sort of morning for me but hopefully you will all be able to pick off those pips this afternoon - trade well and regards,
Simon.

yeouch mate..............on some of my more customised Indicators I had following signals :-

T1 - Buy USD 6.45ish to just after 8am....(already mentioned in earlier E-mails)
T2 - Sell USD 8.30am to 9.30ish....
T-3 Sell USD 11.15am to 11.50ish...

and re the counterpart currency partner I saw :-

T1 - the whole Eurotribe (GBP,Euro and CHF) behaved nicely in falling
T2 - it was a tightish G6 actually with GBP strongest move up (eventually)
T3 - the whole Eurotribe (GBP,Euro and CHF) rose - GBP was most volatile

so positive pip territory in theory....but I am not trading at present as you all know due to work and other time pressures.....I still love to run them in the background though re continued testing, testing,testing... :smart:

....and on days like this they make me look good........umm - lets ignore the bad days :whistling

N

 

[jrplimited]

Hi Simon

My deepest sympathies to you and your Family.......

Neil

Cheers Neil, she was the one I visited a couple of weeks ago so yesterday's passing was no surprise to all the family - great lady and a great innings at 86 years.
Simon.