M TTT M

A Chart showing the win loss progress of each trade per TS Order 3

TS Order 3-S1 and TS Order 3-S5 are shown and as each successive TS Order 3 set is completed the chart will be updated.

This allows fast comparisons and observations between different TS Sets.

The pairs are color coded per trade outcome as follows:

Green = Full TP
Light Green = partial TP
Pink = Full SL
Light Pink = partial SL
Gray = Pair was not traded

Note 1: Each TS set shows only 8 trades and this is due to each set having 1 pending order that failed to trigger.

Note 2: The symbols font color represents the direction into the market (blue=long; red=short).

Note 3: The 2 charts showing losses and wins for trades does not refer to the ordering of pairs (refer to TE or myfxbook).

Masterrmind............

Getting primed for the next stage in the MTTTM Strategy

So far a very basic approach has been outlined in the MTTTM Strategy.

We learnt that:

(a) the same base currencies with different counter (quote) currencies can be used to form TS's
(b) the same counter (quote) currencies with different base currencies can be used to form TS's
(c) TS Orders are odd numbered such as 1,3,5,7,9,11,13 etc
(d) a TS Order 1 applies 3 pairs in a triangulated format (random, hedged or other)
(e) a TS Order 3 applies 9 pairs in a triangulated format (random, hedged or other)
(f) higher Order TS's are simply mulitiples of 3 to gain pair count (Order 5 = 5*3 = 15 pairs, Order 7=7*3=21 pairs, Order 9=27 pairs etc)
(g) smaller funded accounts should consider trading only smaller Order TS setups due to margin requirements and minimal lots available
(h) larger accounts have greater flexibility and may trade any Order TS to a point
(i) Masterrmind Choice is TS Order 3 and TS Order 9 (TS Order 3(^2))
(j) the higher the TS Order the greater becomes the requirement to apply an Expert Advisor to assist in managing the multiple trades in the setup

Using the pairs AUDNZD and AUDJPY we could form NZDJPY
Using the pairs EURUSD and GBPUSD we could form EURGBP
Using the pairs AUDCAD and GBPCAD we could form GBPAUD

Effectively we start with 1 sets of pairs (2 pairs) to make a total of 3 pairs in a TS Order 1
Effectively we start with 3 sets of pairs (6 pairs) to make a total of 9 pairs in a TS Order 3
Effectively we start with 5 sets of pairs (10 pairs) to make a total of 15 pairs in a TS Order 5
Effectively we start with 7 sets of pairs (14 pairs) to make a total of 21 pairs in a TS Order 7
Effectively we start with 9 sets of pairs (18 pairs) to make a total of 27 pairs in a TS Order 9

Note: It is unlikely that very high Orders of TS's (such as greater than Order 9) would ever need to be traded no matter the account balance.
Note: Plenty of options are available even in a TS Order 3 including what pairs make up a TS, choice of direction and combinations.
Note: Both TS's traded as examples were based on keeping left hand side same direction and right hand side opposite but this can also be changed.

For example, In TS Order 3 Scenario 1 I traded:

Scenario 1
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

TS1
Left hand side = AUDNZD + AUDJPY
Right hand side = NZDJPY

TS2 and TS3 follow a similar logic

Then in TS Order 3 Scenario 5 (other trader dictated choice from 8 possibles) I traded:

Scenario 5
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

TS1
Left hand side = AUDNZD + AUDJPY
Right hand side = NZDJPY

TS2 and TS3 follow a similar logic

So I fixed the direction as follows:

If 1 pair on the left was long (AUDNZD) then the second pair had to be long (AUDJPY) and pair 3 had to be short (NZDJPY).
If 1 pair on the left was short (AUDNZD) then the second pair had to be short (AUDJPY) and pair 3 had to be long (NZDJPY).

In the next Level of the MTTTM Strategy I will look at changing the pair direction so that on the same side the direction may or may not be the same.

We use the notation TS to represent a single triangulated set which contains only 3 pairs,

TS1 = AUDNZD + AUDJPY = NZDJPY
TS2 = EURUSD + GBPUSD = EURGBP
TS3 = AUDCAD + GBPCAD = GBPAUD

Triangulated Set Order 3 Scenarios (combinations)

Scenario 1
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

Scenario 2
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

Scenario 3
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

Scenario 4
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

Scenario 5
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

Scenario 6
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

Scenario 7
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

Scenario 8
TS 1 = AUDNZD + AUDJPY = NZDJPY
TS 2 = EURUSD + GBPUSD = EURGBP
TS 3 = AUDCAD + GBPCAD = GBPAUD

Changing the directions of pairs on the same side of the TS pair equation can be shown as follows:

(i) TS1 = AUDNZD + AUDJPY = NZDJPY
(ii) TS1 = AUDNZD + AUDJPY = NZDJPY
(iii) TS1 = AUDNZD + AUDJPY = NZDJPY

(iv) TS 2 = EURUSD + GBPUSD = EURGBP
(v) TS 2 = EURUSD + GBPUSD = EURGBP
(vi) TS 2 = EURUSD + GBPUSD = EURGBP

(vii) TS 3 = AUDCAD + GBPCAD = GBPAUD
(viii) TS 3 = AUDCAD + GBPCAD = GBPAUD
(ix) TS 3 = AUDCAD + GBPCAD = GBPAUD

Notice how I started with only 6 pairs and this generated 9 pairs in a TS Order 3 setup.

Then by fixing a direction to one side of the TS equation and having the other side opposite this produced 8 combinations.

Now imagine the combinations possible by changing out and adding in only combination (i) or (ii) or any number of the (i) through (ix).

All of this is possible from a small 6 initial pairs.

ps. next post will start exploring hedging in triangulated setups.

Masterrmind...........

HEDGING IN MTTTM TRIANGULATED SETUPS

Hedging in the FX Retail Market can apply several types of strategies and have a host of slightly different meanings.

I am open to healthy discussion in this area so that other traders can outline their own views however only provided that they do not attempt to force their own thinking on other participants of this thread.

This is because I have a well planned out strategy to hedge in the MTTTM Trading Strategy based on the guidelines in Post 1.

Currency pair hedging:

The basic definition of single pair hedging is to open 2 trades on the same pair at about the same time in opposite directions.

MTTTM hedging:

Triangulated pair hedging in MTTTM may be full or partial and may or may not link between different TS's on the same TS Order setup.
The hedging may or may not include the addition of lot multiplying factors to certain pairs in a TS that serve to flatten or offset risk.
Although unlikely that single pair hedging will occur it is possible under certain conditions.
Hedging may occur between a triangulated set of pairs which may link to other triangulated pairs (eg TS1 and/or TS2 and/or TS3).
The degree and extent to which hedging may be applied can therefore vary in the MTTTM Strategy.

Positive Correlation Tables (source: myfxbook)

There are many sources of data on positive or other types of correlation in currency pairs.

In house analysis systems are applied very commonly however, myfxbook is a sufficient source to use in this MTTTM strategy.

TS Order 3
TS1 = AUDNZD + AUDJPY = NZDJPY (or any other ordering of these 3 pairs)
TS2 = EURUSD + GBPUSD = EURGBP (or any other ordering of these 3 pairs)
TS3 = AUDCAD + GBPCAD = GBPAUD (or any other ordering of these 3 pairs)

Each TS will however only ever contain the same 3 pairs such as:

TS1 will always contain the pairs AUDNZD, AUDJPY and NZDJPY
TS2 will always contain the pairs EURUSD, GBPUSD and EURGBP
TS3 will always contain the pairs AUDCAD, GBPCAD and GBPAUD

Note that this is relevant for the testing phase only and when live trading or other future test examples are used they may vary.

If the TS Order 3 is going to comprise a different makeup of pairs then it will be clearly outlined in advance.

The 3 correlation charts show the correlation of the TS Order 3 pairs:

Daily Correlation Chart (myfxbook)

Marking Correlations

Weekly Correlation Chart (myfxbook)

Marking Correlations

Monthly Correlation Chart (myfxbook)

Marking Correlations

Masterrmind.............

Applying the correlation to TS Order 3 for D1, W1 and MN

TS Order 3 (9 pairs)
TS1 = AUDNZD + AUDJPY = NZDJPY
TS2 = EURUSD + GBPUSD = EURGBP
TS3 = AUDCAD + GBPCAD = GBPAUD

Choosing the pair sequence based on positive correlation for each TS individually we have:

TS1 = AUDNZD, AUDJPY, NZDJPY

D1: AN correlated to AJ = +37.8%
D1: AN correlated to NJ = -19.8%
D1: AJ correlated to NJ = +83.2%

W1: AN correlated to AJ = +29.9%
W1: AN correlated to NJ = -57.8%
W1: AJ correlated to NJ = +60.6%

MN: AN correlated to AJ = +32.4%
MN: AN correlated to NJ = -8.4%
MN: AJ correlated to NJ = +91.5%

TS2 = EURUSD, GBPUSD, EURGBP

D1: EU correlated to GU = +67.8%
D1: EU correlated to EG = +25.8%
D1: GU correlated to EG = -53.5%

W1: EU correlated to GU = +89.0%
W1: EU correlated to EG = +83.3%
W1: GU correlated to EG = +48.9%

MN: EU correlated to GU = +74.1%
MN: EU correlated to EG = +17.7%
MN: GU correlated to EG = -52.9%

TS3 = AUDCAD, GBPCAD, GBPAUD

D1: AC correlated to GC = -23.3%
D1: AC correlated to GA = -63.7%
D1: GC correlated to GA = +89.8%

W1: AC correlated to GC = +21.5%
W1: AC correlated to GA = -40.9%
W1: GC correlated to GA = +80.3%

MN: AC correlated to GC = -43.4%
MN: AC correlated to GA = -67.3%
MN: GC correlated to GA = +95.8%

Next is how to interpret the data.

Masterrmind............

Now lets take a step further and examine the data on each TS one by one.

What we may want to do is group the highest correlated pairs against the weakest pair.

Note that there are other ways to group the pairs.

TS1 = AUDNZD, AUDJPY, NZDJPY

D1: AN correlated to AJ = +37.8%
D1: AN correlated to NJ = -19.8%
D1: AJ correlated to NJ = +83.2%

W1: AN correlated to AJ = +29.9%
W1: AN correlated to NJ = -57.8%
W1: AJ correlated to NJ = +60.6%

MN: AN correlated to AJ = +32.4%
MN: AN correlated to NJ = -8.4%
MN: AJ correlated to NJ = +91.5%

According to the data from myfxbook the following is reasonably clear:

AUDNZD and AUDJPY are positively correlated across D1, W1 and MN but not very high.
AUDNZD and NZDJPY are negatively correlated across D1, W1 and MN but relatively small except for W1.
AUDJPY and NZDJPY are positively correlated across D1, W1 and MN and very strongly.

Strongest positive correlation for TS1 is between AUDJPY and NZDJPY
Next strongest positive correlation for TS1 is between AUDNZD and AUDJPY
Weakest correlation for TS1 is between AUDNZD and NZDJPY

Pair Ordering Criteria:

For the purposes of this exercise the pair ordering will group the highest positvely correlated pairs against the weakest pair'

Pair Order is therefore,

AUDJPY + NZDJPY = AUDNZD

Or is it ?

ps. TS2 and TS3 same procedure and then we need to set the direction of each pair.

Masterrmind............

EURUSD + GBPUSD = EURGBP
GBPCAD + GBPAUD = AUDCAD

is that correct?

Correct !

I will post TS2 and TS3 later.

Next task is to assign direction for each pair of each TS.

Have a go at choosing the direction if you wish.

Masterrmind.......

I'm not sure where youre going with correlation. I'm guessing one would want to trade most correlated 2 pairs one long, one short and 3rd (least correlated) does not matter much. That way it's good probability to get at least 1 winner and still decent probability to get 2 wins from 1 set.

Myfxbook not explain what formula is using then I will think is using a simpler pips movement in that range. If 2 pairs move 100 pips in same direction will be 100%.

First problem is you need normalize pairs movement taking their volatility because every pair have different speed when moves.
Second problem is you will need every pair start movement in exact octave for that movement finish in next level.

But as is implemented your strategy this is impossible because:

First you cant have 100% correlation always
Second your strategy cant guarantee perfect level sync between pairs in one TS

Then finally question is what do you want and what you will get really. You have a theoric performance in a TS from -X% to X% if a TS is executed perfectly. As you can't get that you are getting a worst theoric performance. If we think all combinations you exposed in older posts as levels and first level profitable as the pivot you are suffering a shift of your pivot. As your pivot have a positive displacement ( you have more levels profitables than losers) statistically a non compliment of your theoric combinations will make that pivot move negatively making some weak profitable levels in losers.

I don't want put examples for dont do this so long. The conclusion is simpler. You have 2 pieces in your system. MM and strategy ( octave levels). First is a scale of strategy risk taking a external reference ( correlation pairs) and second is who apply better or worst that scale depending execution precision. Then change pairs in TS have very litle effect in global performance comparing with strategy changes. Then you have focus how strategy try accomplish the MM requeriments. Try sort pairs in a group using correlation not solve your problem or guarantee you will improve. You can get a small impact % using this approach because you havent way to control strategy execution

Following on from the same logic as TS1 we can arrive at a pair ordering for TS2 and TS3 as follows:

TS2 = EURUSD, GBPUSD, EURGBP

D1: EU correlated to GU = +67.8%
D1: EU correlated to EG = +25.8%
D1: GU correlated to EG = -53.5%

W1: EU correlated to GU = +89.0%
W1: EU correlated to EG = +83.3%
W1: GU correlated to EG = +48.9%

MN: EU correlated to GU = +74.1%
MN: EU correlated to EG = +17.7%
MN: GU correlated to EG = -52.9%

The pairs EU and GU are highly positively correlated over D1, W1 and MN.
The pair EG is more correlated to EU than GU.

Pair Ordering is EURUSD + GBPUSD = EURGBP


TS3 = AUDCAD, GBPCAD, GBPAUD

D1: AC correlated to GC = -23.3%
D1: AC correlated to GA = -63.7%
D1: GC correlated to GA = +89.8%

W1: AC correlated to GC = +21.5%
W1: AC correlated to GA = -40.9%
W1: GC correlated to GA = +80.3%

MN: AC correlated to GC = -43.4%
MN: AC correlated to GA = -67.3%
MN: GC correlated to GA = +95.8%

The pairs GC and GA are highly positively correlated over D1, W1 and MN.
The pair AC is least correlated to GA.

Pair Ordering is GBPAUD + GBPCAD = AUDCAD

Masterrmind..............

Since a criteria has been set for the ordering of the pairs in the TS's we now have a far less randomly determined approach.

TS Order 3 (positive correlation versus least correlated)
TS1 = AUDJPY + NZDJPY = AUDNZD
TS2 = EURUSD + GBPUSD = EURGBP
TS3 = GBPAUD + GBPCAD = AUDCAD

Direction now has to be decided.

How might a trader go about making such a decision ?

Masterrmind.............

According to the correlation table (Im only considering D1)

(i) TS1 = AUDNZD + AUDJPY = NZDJPY is the way to go because Audjpy and nzdjpy are positively correlated and Nzdjpy and Audnzd are negatively correlated.

TS 2 = EURUSD + GBPUSD = EURGBP EurGbp and GbpUsd are negatively correlated but EU and GU are positively correlated.

Masterrmind, is there any indi or template.... which is supporting what to decide when?

You mentioned trading 1 positively correlated pair long and the other short and doesn't matter much about the 3rd pair. (are you sure ??)

Masterrmind...........

If we trade correlated pairs to same direction, it means we are concetrating risk, not spreading it, might as well trade one pair with more lots. But maybe I dont understand.

I never take 1 data source as the real deal until I've checked them several other sources.

The correlation tables used in myfxbook are good enough for use in this strategy.

If you have the time you can simply import reliable data into Excel and do the corrlations yourself.

I've done this as a simple check for several different periods on multiple pairs.

I'm not looking to have 100% correlation.

Correlation actually changes over time, more so over shorter time periods than longer.

What I'm after is a general behavior for the time frame of interest on the set of pairs I'm planning to trade.

Your mention of volatility however, is what I've been waiting to hear because this needs to be considered.

Some lot multiplier can be used on slower moving pairs can it not ?

What about the distribution of assumed risk within a given TS across the 3 pairs ?

If risk per TS is max 3% assuming 1% risk per trade, then how about applying proportionately more risk to the 'slower' moving pair.

The next hurdle potentially is the size of the octave gap as in the applied SL.

I'm sure that a higher TF with wider stops applying some of these techniques and the same risk profile will work splendidly.

I'll certainly be trading several such examples come early January.

ps. thanks for your comments.

Masterrmind.............

There is a zip folder containing a slightly updated version with the Pip_Value indicator and a Lot size indicator and the template.

For whatever reason I keep getting an error when I try to upload them ina zip folder, never happened before.

Anyway I will try to get to the bottom of this issue over the enxt few days and upload it.

Note that the indicators are informative only, not decision or trade makers, the trader needs to do that work.

Keep a watch on Post 1.

ps. I am looking into having the 2 indicators I mentioned above joined to form only the 1.

Masterrmind..............

Concentrating risk is not what we want to do, if anything we would want to spread it around between other pairs.

Have a go at trying to hedge the 3 TS's and see what directions per pair you come up with.

Masterrmind..............

the pairs involved are triangulated thats the edge. if you spread risk it means you are going for perfect hedging no edge there.

Edge, if there is any, is 4:1 rr with decent probability