Best Thread Correlation Trading - Basic Ideas and Strategies

[NVP]

if I was going to trade the us session I would be warming up the screens now and assessing the last hour as a forerunner to action........

always worth looking at the week on a Friday to see if any big weekly moves will close out for weekend (sure I have loads of stuff that shows this better but its all mainly my customised and bespoke software - sorry)

heres a high setting on the free fxcorrelator to give more of a granular feel to moves .....ignore the Zero line really for assessing whos moved in week and take the opening position of each currency on Monday as baseline ......

looking at the week .......Yen has had a big week and has already sold off (overnight was Asian weekend remember)......brown cad the seller and again came back yesterday already ....could come back more if under pressure but don't bet the house on it

later
N

 

[NVP]

in responding to another thread on performance - jees i'm a tough taskmaster !!!

I can only mainly talk forex experience in recent years but what most traders miss when benchmarking their performance is what was POSSIBLE in the market vs their performance ...

eg a trader shows me that they made on average 30-40 pips a day on the London morning session this week............. (avg say 4hours a day trading)

do I praise them or kick them in the butt ?

depends on the day !!.....and what the market offered vs what they took............

some days that was pretty ok as market was choppy.........other days when the dynamics were in full motion I would have expected 30-40 pips PER PAIR traded for that period of time scalping

so they get a reprimand

N

 

[NVP]

With a good selection of different types of strategies and various markets - "something should work all the time".

And it is trivial to trade 50 strategies each in 10 markets. Yes, you have to come up with them, but a decent computer and an infrastructure written for handling many strategies (sadly most are not - ridiculous if you ask me) have no problem running 500 strategies 24/7.


For a human, handling a significant number totally separate strategies is simply not possible.

100% agree here ............so I have a lot of algo support that set me up to then trade manually"..................sorry I havnt got the major money to invest in the algo systems that give 100% assurances on relaiability ....that's the big bank/hedgefund domains.........if anyone 100% trusts their (or someone elses) homegrown EA in this retail sector then you are being very naïve .............they can and will fail eventually ...........and excuses don't pay the rent when they fail

N

 

[NVP]

Martingale will blow your account no matter what.

remember BJ...........its not martingale that will fail you .......its the system the martingale is being used on

 

[NVP]

15 mins or less then?

hey S.....no disrespect meant .........every timeframe and setting works ...................for me its about getting cash in the bank daily inside 2 hours and the 1minute is therefore where I live (faster if I could be bothered to programme it).......

give me a bulletpoint briefing on what your preference is for TF and trading style and we can talk about my recommended FXCorrelator settings for it


N

 

[NVP]

its the Cup final next week for GBP with brexit..............will make the NFP's look like a sunday league game on Romney marshes ..........

what do I want to happen ? - doesn't matter
what do I think will happen - doesn't matter
what do I think the markets will do ? - doesn't matter

how will I trade the market that day ?

the same as I do every damn day ..........news events are news events.......trade what you see before and after the news releases .............. remember this will be a drip feed I believe area by area so plenty of time to have fun and make a lot of money

cant wait ..........whatever the outcome we as traders will win !

N

 

[NVP]

Hi, Long time lurker here.

I'd like my advice on my system.

I have demo traded for 4 months, then went live with £4,000 (spread betting). And i have made a consistent profit every week.

The system is basically as follows.

I watch the m1 chart on the DAX and look for pin bars that swing out out the current range or trend. I then trade them in the standard pin bar fashion. Trade the break. Stop loss 1 point just below/above the tail.

And that's it, I don't look at other time frames, no indicators, no support and resistance, no trend lines, no MA's fibs or key levels. literally nothing else. With the exception of not trading around news.

My risk management is a follows.

Risk 1% (£40) per trade
4 losing trades in a row and thats it for the day
If the pin requires more then a 10 point stop, no trade.
Exit at around 6/7 pips. (trades rarely last longer then 2 minutes)

Thats it.

-------------------------------------

I've made £6,287 i'm 4 months, which is roughly £80 a day.

Is this luck? Am i trading favourable market conditions.?

Don't get me wrong, i'm not new to trading, I've been chewed up and spat out by the markets a number of times. Mostly due to losing my cool and staring gambling rather then trading.

Eventually I changed the way i think about trading. I stopped thinking about the money and thought only about my plan.

Win or lose, i want to be able to look at myself in the mirror at the end of each day and say "Today i did not make a mistake. Today i did not break my rules"


But I still lack confidence in my system. It very basic, is this going to come tumbling down? I go onto Forex factory and read other peoples systems and i just get lost in the terminology and complexity of it all.

Do I quit while i'm ahead? I read often that traders will make money at first and then lose it all.

the word here is .............DEMO

Demo is kind dude...........real kind ............you need to be making a lot more than this before even thinking you can B/E in real accounts

sorry to burst the bubble ........

nothing wrong with simple ............but it has to work in the real world and not fantasy DEMO trading

sorry again ..........but hang in there !!

N

 

[NVP]

Its like playing poker for matchsticks... putting down $100 instead of a matchstick certainly grabs your attention and affects your behavior completely. With Forex I think its better just to see the figures as numbers and not money... if we can do that then we would all probably be better traders but easier said than done.

if you think about what money in its real world terms when trading you will fail

when you walk up to the screens and trade ...its just chips (poker chips - worthless).........disconnect its worth or you will fail over time ...........especially when you can take the stakes higher ......your subliminal mind will confuse you as it will panic over what "things/assets" you are potentially losing

ive met a lot of good potential traders that couldn't make the jump........nothing wrong with it .........depends how you are wired inside

I was kinda lucky as I saw a lot of money moving around from an early age ......my family were bookmakers .............so gambing / speculation / risk was part of growing up to me and normal

N

 

[NVP]

thanks for defining a new swing low in babypips. my little cousin is 14 and is having a pokerstars money account.

last week i withdrawed 20.000 from my broker and got it wirhin 48 hours.

it is less likely to run into withdrawelproblems then likely that he will be profitable in trading. stick to regulated brokers with ther location in the big financial hubs: new york. london. frankfurt. zürich. tokyo. paris. madrid. milano - and you will have no problems

so plese first focus on beeing profitable then make out the details about saving taxes withdraw times and tight soreads/low rolls/cheaper alternatives then ecn broker etc

that's pretty young to be trading ............I grew up in a Gambling family who were also successful bookmakers so was allowed an account by 13 (had already worked for them since an early age learning the business though) ........I was making a lot of money in my early teens ..................but again that's because they trained me well.......

I would never have let a child of mine play real money in their early teens ........well perhaps I would if they proved to me they could do it ...........but with a firm leash on debt

you wont be able to stop them anyway ..........not these days

N

 

[NVP]

the question I get asked the most is

how can I find that quick win .....Holy grail .......signal / system ?

and as all experienced traders know .................there isn't one !

the Holy grail is all inside your head ...........created and nurtured over years of training, research, experience, screentime, adapting, experimenting..........and dogged determination

if someone gave a novice trader the holy grail - they wouldn't know it if it jumped up at them with bells on .............it will eventually appear over time when it is ready for them (if ever)

that's the $1,000,000 million dollar unanswered question for them ...........

N

 

[NVP]

Why is it that the statement "95% of Forex traders lose their money", conflict with Educational Forex material that teach you on how to become a profitable and rich Forex trader.
Which statement is more honest and true?

because they are trying to sell you training material and need to pull you in ...........in fact in truth I would say less than 1% of people who try to trade for real money stay consistently profitable over time ......

why so low .....?

because of the thousands of wannabee traders that put some cash down then walk away .........they feed the sample %

and not only do they dump cash losing but the Vendors try to fleece them on the way out with courses teaching them free strategies .........

no wonder this industry gets such bad reviews .......most vendors are up there with timeshare , PPi and double glazing.........

N

 

[NVP]

Both winning and losing are part of trading, you just have to prepared and knowledgeable on how to deal with it.

losing is part of trading .........like food wastage in restaurants and breakages in a crockery factory

you cant have a sucessful business without these kind of things...... so learn to contain it to a minimum and live with it !!

N

 

[NVP]

ok that was a quick tour of the latest posts around the forums .... pulling in anything interesting ..........have a good weekend

N

 

[NVP]

Been a great session this morning for me ..see my scalping thread


third time the market has spiked to very very high G8 volatility levels so far London

(a little like a forex VIX measure I use in my own stable of indicators).....

usually we are lucky to see one of this in forst few hours of London

3 is a real treat (like I have been saying - today is a gift of a session)

so make the most of this weeks Brexit volatility !!!!!!!

N

 

[NVP]

just looking at GBP to Euro rates

will be interesting to see if the Brexit shakes the market enough to breach some key S/R levels over the recent weeks / months

R = 0.8107 (1.23)
S = 0.7500 (1.33)

last 2 weeks certainly offering more strength to GBP .......and today is a storming GBP performance so far (with euro the DOG in G8)

will be an interesting week that's for sure

N

 

[NVP]

popped back and stayed a while picking up a nice handful of pips on 4 pairs (See scalping thread)

back later
n

 

[NVP]

morning all.........

sorry re delays .........ive been trading but had to also do some early work stuff as the systems crashed last night and I had to play catch up ......posting comes 3rd !

heres where we are today .......catch more at my trading thread

overnights
cad bull to +50's , GBP late swing to +50's
NZD and CHF the sellers to -30's .....GBP was there as well
Volatile GBP !!!! (surprise surprise)

London from 6am
all GBP buys to + 60's
Yen the main sell to -40's

PAirs being traded so far
Well GJ Is THE buy pair ..........its too volatile for me normally to touch though
GU buys to + 50 have been fine
ej and uj buys to +30s so far

overall the gbp is again on fire today ............it is flying literally as the warm ups begin for Thursday ........easy money if you wait for the natural moves ..........GBP volatility literally drags the GU with it no matter what usd is doing

ok back to the show
N

 

[NVP]

I have been working as a finance / commercial analyst since the 1980's.....most*in fairly senior positions for some of the largest Blue chips in the world.

one of the things I*have to bring to the table for my Directors is a logical and objective approach to support all decision making - from internal decisions on resource allocations ($ costs / people) to also*ensuring that all contracts with external clients and customers are agreed with a full appreciation of the numbers and risks involved to our organisation.

If you know any accountants you will know we are not the worlds most touchy feely people ...our work is very objective and we will conduct all work in a diligent and controlled manner to ensure our customers get what they need from us - the facts and figures !

now as an analyst asked to "run the numbers" on a business case / project / deal (and ive done it hundreds*of times now over the many years) the first thing you do is*

Get all the facts and all the applicable data available to use in the process *

no games , no hearsay, no opinions.........they may be useful later to the decision makers but my job is always to give them what we know and can be proved and to crunch the numbers.

so whats this got to do with trading strengthmeters ? ...........a lot actually .........

the first rule in data modelling and analysis is to go down to the lowest level possible to then start to understand the dynamics and drivers of the business model being reviewed........

in laymans terms you have to look under the bonnet to understand how the car actually works ..........

when i started looking seriously at Forex trading in the early 2000's the first thing I*needed to understand about pair analysis was the dynamics of the 2 constituents of any pair *- ie what were the 2 individual currencies doing in that pair at any given time*

BUT- *there was minimal stuff out there in the forex cosmos about this ...........sure i could get 400 million articles on how to trade a pair..........moving averages , fibonacci , price action , support resistance the list is endless.......pair trading has loads of free information and research documents*

but each time i asked someone about the 2 individual currencies*involved in the pair most looked at me like i was an alien !

what do you need to know that for ? ...........the gbpusd is rising ......so the gbp is clearly stronger than the usd ok ? .........who*cares ? .......forget about it !!?*

well actually I do care ..............I'm an analyst remember ?........the deeper and more diligent and more complete my research is the more I can help to make the best decision*in a situation...........skimming the surface does*not help make the best decisions in any situation .....remember that in all walks of life .........

so the reason i always am 100% attuned to the dynamics of both Currency A and Currency B *in the PAIR AB is simple ............Knowledge is power*

so remember that next time i ask you how much did the USD actually contribute to the pair when GbpUsd *goes up 100 pips in a session .....because you cant answer it unless you look under the bonnet .......

and maybe then we can get you into my unique way of looking at forex trading and the massive edge it brings .......

Neil **(NVP):smart:

 

[NVP]

cracking lunchbreak session for me ..

check out my other scalping thread

 

[NVP]

hey guys

in response to some recent requests heres a pretty simple system based loosely on Captain currencies 3 ducks

have a good day
N