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Trading correlation pairs by using the other pairs

  • #341
  • May 23, 2020 5:54pm May 23, 2020 5:54pm
Quoting Shabs19
{quote} Some useful scripts must haves: 1. Delete objects by type. {file} 2. Clean Up order based objects. {file} 3. Account details {file} 4. Local Time {file} 5. Jumpstart (Chart force refresh) {file} 6. Change Timeframe all charts {file} 7. Change Template all charts {file} 8. Undock chart {file} Keyboard shortcuts: F1- MT4 Help F2- MT4 History Center F3- MT4 Global variables F4- MT4 MetaEditor F8- MT4 Chart Properties F9- MT4 Order panel F10- MT4 pop up prices panel F11- MT4 expand chart / Hide toolbar F12- with scroll lock & Shift end key disengaged,...
Great input great tools.
Thank you.
  • #342
  • May 24, 2020 7:01am May 24, 2020 7:01am
Going to be testing these two indicators this week.
Any suggestions would be welcome.

Attached File(s)
File Type: ex4 ninety47_CorrelationTable_v1.2.4.ex4   37 KB | 291 downloads


Attached File(s)
File Type: ex4 ninety47_CorrelationOscillator_v1.0_beta.ex4   58 KB | 252 downloads


Here is a picture of the indicators.
Attached Image (click to enlarge)
Click to Enlarge Name: test.png Size: 121 KB
  • #343
  • May 24, 2020 7:03am May 24, 2020 7:03am
Quoting redfan
These yellow lines represent where the candles are the same colours, it's the one hour chart, every single one of them represented an entry point this was without looking at it any other indicators, {image}
Good day Redfan, thanks for the wealth of knowledge you are passing down, i am really learning alot here, my question is ; when these candles appear similar and the directions become predictable, shouldn't that be a good entry point to catch some pips and how reliable can this be?
  • #344
  • May 24, 2020 7:20am May 24, 2020 7:20am
I came across these in my travels, no idea how they work or if they are useful. Seems relevant to this thread, so posting.
If anyone wants to test them, then give feedback here.

Attached Image (click to enlarge)
Click to Enlarge Name: correlation matrix.png Size: 147 KB


Attached File(s)
File Type: mq4 DuettoFX_Matrix_.mq4   11 KB | 482 downloads

Attached File(s)
File Type: mq4 PotenzaFX_Matrix_.mq4   12 KB | 458 downloads

Attached File(s)
File Type: mq4 Pearson.mq4   9 KB | 408 downloads
It never gets easier, you just get better
  • #345
  • May 24, 2020 2:05pm May 24, 2020 2:05pm
Quoting AdiePolycarp
{quote} Good day Redfan, thanks for the wealth of knowledge you are passing down, i am really learning alot here, my question is ; when these candles appear similar and the directions become predictable, shouldn't that be a good entry point to catch some pips and how reliable can this be?

Yes, it's always easy to look back and see where you should have entered,
But in real-time, You are sat there waiting, stare at charts waiting to capture the entry point,
and that's where the trouble begins because the minute you get up and walk away from the chart you miss the entry point, And the other problem is the same candles are the same colour which way do go?
You need something to back up the entry point.
I was considering buy one sell the other, And as soon as you realised, Which one is moving in the right direction, You could stop the other one for a little loss,
But then even that doesn't work out, sometimes and you can just get yourself in a mess,
so the search is on for a, something to back up the entry point.
  • #346
  • May 24, 2020 2:07pm May 24, 2020 2:07pm
Quoting Shabs19
I came across these in my travels, no idea how they work or if they are useful. Seems relevant to this thread, so posting. If anyone wants to test them, then give feedback here. {image} {file} {file} {file}

Like this Pearson indicator, it's better than the one I put on,
good input,
Thank you.
  • #347
  • May 24, 2020 2:50pm May 24, 2020 2:50pm
These pairs cannot be correct. There is no way all three of them can move in the same direction
two of them ARE negative AND move away from each other,
I've not checked all the pairs on this list, be careful,

Look at the chart with the 3 pairs AUDUSD and USDCAD ARE negative,
AUDCAD looks like it's positive.
Attached Image (click to enlarge)
Click to Enlarge Name: usdcad audusd.png Size: 101 KB


Attached Image (click to enlarge)
Click to Enlarge Name: not correct.png Size: 861 KB
  • #348
  • May 24, 2020 2:57pm May 24, 2020 2:57pm
Quoting redfan
These pairs cannot be correct. There is no way all three of them can move in the same direction two of them ARE negative AND move away from each other, I've not checked all the pairs on this list, be careful, Look at the chart with the 3 pairs AUDUSD and USDCAD ARE negative, AUDCAD looks like it's positive. {image} {image}
It' s correct:

if AUDUSD UP -> AUD UP

if USDCAD UP -> CAD DOWN

so.....AUDCAD UP
  • #349
  • May 24, 2020 4:05pm May 24, 2020 4:05pm
Quoting redfan
These pairs cannot be correct. There is no way all three of them can move in the same direction two of them ARE negative AND move away from each other, I've not checked all the pairs on this list, be careful, Look at the chart with the 3 pairs AUDUSD and USDCAD ARE negative, AUDCAD looks like it's positive. {image} {image}
The only way you can time your entry is to observe price action from a higher timeframe to establish a current trend in force and wait to get into a pullback to the HTF trend on a lower timeframe. Correlation can change in a moment if the pair is approaching previous Highs/Lows in the market and also at High Impact News Events.
It never gets easier, you just get better
  • #350
  • May 24, 2020 4:40pm May 24, 2020 4:40pm
OO
Quoting MQLTrade
{quote} It' s correct: if AUDUSD UP -> AUD UP if USDCAD UP -> CAD DOWN so.....AUDCAD UP
If you look at the chart. All three are them pairs do not go in the same direction for any length of time,
in the smaller timeframes. One of them will not follow the other two for more than two candles,
the only time you see it is in four hours and above, I've cross them off my list
I'm only trading for one hour and below.
  • #351
  • May 25, 2020 2:24am May 25, 2020 2:24am
Quoting redfan
OO{quote} If you look at the chart. All three are them pairs do not go in the same direction for any length of time, in the smaller timeframes. One of them will not follow the other two for more than two candles, the only time you see it is in four hours and above, I've cross them off my list I'm only trading for one hour and below.
It's correct:

AUDUSD: goes down
USDCAD: goes UP

So AUDCAD sideway SHORT..... it's correct
  • #352
  • May 25, 2020 4:24am May 25, 2020 4:24am
Quoting MQLTrade
{quote} It's correct: AUDUSD: goes down USDCAD: goes UP So AUDCAD sideway SHORT..... it's correct
USD strength weakness/strength across other major pairs will also make a difference. AUD is not a major.
Statement only works if one currency is strong against all other pairs and at the same time the other is weak against all pairs.
Compairing a small grouping will produce inconsistent results.

Bank Holidays in the US & UK today. So volumes will be low.
It never gets easier, you just get better
  • #353
  • May 25, 2020 4:37am May 25, 2020 4:37am
[quote=Shabs19;12961275]{quote} USD strength weakness/strength across other major pairs will also make a difference. AUD is not a major. Statement only works if one currency is strong against all other pairs and at the same time the other is weak against all pairs. Compairing a small grouping will produce inconsistent results. /quote]

NOT Correct:

AUDUSD: goes down USDCAD: goes UP So

- AUDCAD sideway DOWN if CAD > AUD
- AUDCAD sideway UP if AUD > CAD

In a triangular spread....u have to see all 3 currencies, NOT only USD
  • #354
  • May 25, 2020 4:55am May 25, 2020 4:55am
Quoting MQLTrade
{quote} It's correct: AUDUSD: goes down USDCAD: goes UP So AUDCAD sideway SHORT..... it's correct

Look at the list they have all got to be going up or all got to be going down.
What you wrote AUDUSD GO DOWN, USDCAD GO UP, IS wrong
they've all got green arrows beside them it all or no trade,

Attached Image


This is why I think the list is wrong, AUDUSD+USDCAD are negative pairs they can go in the same direction,
  • #355
  • Edited 5:37am May 25, 2020 5:27am | Edited 5:37am
Quoting redfan
{quote} Look at the list they have all got to be going up or all got to be going down. What you wrote AUDUSD GO DOWN, USDCAD GO UP, IS wrong they've all got green arrows beside them it all or no trade, {image} This is why I think the list is wrong, AUDUSD+USDCAD are negative pairs they can go in the same direction,
My post was referred to your chart..... and it's correct if u see how crosses are moving

AUDUSD is inversed correlated to USDCAD because....AUD & CAD are direct correleted, BUT AUD & CAD have difference strength/weakness, so AUDCAD can MOVE UP or DOWN, according net strength relation between AUD e CAD

Table Picture is also correct:

AUDUSD UP + USDCAD UP = AUDCAD UP UP

It means that AUD > USD > CAD..... so AUD > CAD than AUDCAD UP UP...... i don't understand your doubt????

One thing is CORRELATION...other THING is STRENGTH/WEAKNESS
  • #356
  • May 25, 2020 6:06am May 25, 2020 6:06am
Quoting MQLTrade
{quote} My post was referred to your chart..... and it's correct if u see how crosses are moving AUDUSD is inversed correlated to USDCAD because....AUD & CAD are direct correleted, BUT AUD & CAD have difference strength/weakness, so AUDCAD can MOVE UP or DOWN, according net strength relation between AUD e CAD Table Picture is also correct: AUDUSD UP + USDCAD UP = AUDCAD UP UP It means that AUD > USD > CAD..... so AUD > CAD than AUDCAD UP UP...... i don't understand your doubt???? One thing is CORRELATION...other THING is STRENGTH/WEAKNESS...
Right from the very start. I've been referring to the list,
and the rules of the list are they either all go together. or all go down together.
I don't see that with These particular pairs.
And that is my doubt,
well it's been a good discussion
thanks for your input.
  • #357
  • May 25, 2020 7:29am May 25, 2020 7:29am
Quoting MQLTrade
NOT Correct: AUDUSD: goes down USDCAD: goes UP So - AUDCAD sideway DOWN if CAD > AUD - AUDCAD sideway UP if AUD > CAD In a triangular spread....u have to see all 3 currencies, NOT only USD
AUDCAD is a synthetic pair made up from AUDUSD & USDCAD, here the USD being the major for price conversion.
Strength/Weakness in USD would depend on this equation to work consistently.
It never gets easier, you just get better
  • #358
  • May 25, 2020 11:01am May 25, 2020 11:01am
Quoting Shabs19
{quote} AUDCAD is a synthetic pair made up from AUDUSD & USDCAD, here the USD being the major for price conversion. Strength/Weakness in USD would depend on this equation to work consistently.
Additionally:

The other point that always gets forgotten, is that the spread & margin on AUDUSD is lower than USDCAD and AUDCAD.
ADR is about 80 pips, 100 & 55 pips respectively, so value trading wise is never the synthetic pair. always is the major cross.
So if you see AUDUSD rising, just trade check on USD weakness and trade this instead.

Correlation trading makes sense to me only if you are trading the major pairs in that cross.
It never gets easier, you just get better
  • #359
  • May 25, 2020 2:11pm May 25, 2020 2:11pm
Quoting Shabs19
{quote} Additionally: The other point that always gets forgotten, is that the spread & margin on AUDUSD is lower than USDCAD and AUDCAD. ADR is about 80 pips, 100 & 55 pips respectively, so value trading wise is never the synthetic pair. always is the major cross. So if you see AUDUSD rising, just trade check on USD weakness and trade this instead. Correlation trading makes sense to me only if you are trading the major pairs in that cross.

So what indicators/tools measure apples to apples?
  • #360
  • May 26, 2020 2:42am May 26, 2020 2:42am
Quoting dagoods
{quote} So what indicators/tools measure apples to apples?
Check for USD strength against the other majors, EU, GU, UJ then you check the AUD strength against the majors. GA, EA, AJ
Takes only a few minutes at best, there is no indicator. Why majors ? That is where the significant volume will be.

USD down -3, AUD Up +3, simple maths, you know the rest.
It never gets easier, you just get better
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