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Trading correlation pairs by using the other pairs

  • #481
  • Jun 3, 2020 4:36pm Jun 3, 2020 4:36pm
MAJOR PAIRS

I thought I would have a section on what relationship pairs have,
And where they get their strength, I'm going to start with the main two pairs,
I don't want to put lots of writing down,
so I'm going to do this a bit at a time probably two to three pairs each night,


The EUR/USD is the pairing of the euro and the United States dollar. The EUR/USD is the most traded currency pair in the world, accounting for nearly 30% of the total daily volume in FX. This sheer volume makes it incredibly liquid. EUR/USD is highly sensitive to fundamental news announcements released by the U.S., and due to its popularity, traders can access a wealth of analytical information.


The NZD/USD is the pairing of the New Zealand dollar and the United States dollar. New Zealand’s economy is heavily dependent on exporting raw materials. As a result, the NZD’s strength correlates with the price of gold.
  • #482
  • Jun 3, 2020 5:57pm Jun 3, 2020 5:57pm
how can we use correlaiton trading for nfp or fomc news?thnks.i want EA that sells one group and buys another group of currencies so its hedging in one Ea itself and when x amount profit,the Ea closes all trades.game over.
  • #483
  • Jun 4, 2020 1:08am Jun 4, 2020 1:08am
the only problem with the correlation strategy is that sometimes couples are able to break away from each other to a huge extent.
and it can certainly cause a huge loss.
  • #484
  • Jun 4, 2020 2:47am Jun 4, 2020 2:47am
Quoting tiborf71
the only problem with the correlation strategy is that sometimes couples are able to break away from each other to a huge extent. and it can certainly cause a huge loss.
In my opinion, there will be the following divergence between the two correlated pairs, and only one type of divergence will cause huge extent, please give me more comment on this.
Attached Image
  • #485
  • Jun 4, 2020 3:16am Jun 4, 2020 3:16am
let's see, we have two couples.
EURUSD, GBPUSD.
and now look back at the volatility of eurgbp in history.
and now think about when and how you would open a position.
  • #486
  • Jun 4, 2020 5:42am Jun 4, 2020 5:42am
This was another good divergence trade, Took £90 profit
it happened so quick I forgot to take a picture
I've drawn two lines on the chart where I took the trade and the Profit.
Attached Image (click to enlarge)
Click to Enlarge Name: div thu1.png Size: 107 KB
  • #487
  • Jun 4, 2020 7:01am Jun 4, 2020 7:01am
Quoting T4Trade
how can we use correlaiton trading for nfp or fomc news?thnks.i want EA that sells one group and buys another group of currencies so its hedging in one Ea itself and when x amount profit,the Ea closes all trades.game over.
I started a trial on Monday using this divergence indicator,
I've had a win each day this indicator tells you what sort of divergence line it is, I've had more success when it says a classic divergence bearish or bullish,
I'm only trading negative pairs because sometimes you can see one pair is lagging behind the other pair, For instance, when the candles are the same colour, Both pairs if they are negative the candles should always be a different colour, you can take a chance on one of the pairs knowing full well it has to be negative to the other pair
the hard bit is picking which one.
Here a picture this what it tells you.
Attached Image (click to enlarge)
Click to Enlarge Name: div.png Size: 126 KB
  • #488
  • Edited 7:48am Jun 4, 2020 7:09am | Edited 7:48am
Quoting redfan
This was another good divergence trade, Took £90 profit it happened so quick I forgot to take a picture I've drawn two lines on the chart where I took the trade and the Profit. {image}
Note: Solid Lines on the CCI are classic divergence and the dotted lines are Hidden Divergence.

Hidden Divergence always works better as the trend continuation is better than taking a punt at a reversal IMO.
It never gets easier, you just get better
  • #489
  • Jun 4, 2020 7:35am Jun 4, 2020 7:35am
Quoting shabs19
{quote} note: Solid lines on the cci are classic divergence and the dotted lines are hidden divergence. Hidden divergence alwyas works better as the trend continuation is better than taking a punt at a reversal imo.
thank for that input.
  • #490
  • Jun 4, 2020 8:28am Jun 4, 2020 8:28am

MAJOR PAIRS

The GBP/USD is the pairing of the British pound and the United States dollar. Also known as “cable,” GBP/USD is the third most traded pair. Price movements in cable are known to correlate with EUR/USD. Since the pair isn’t as liquid as the EUR/USD, GBP/USD experiences more aggressive price movements when U.S. data is released. The UK boasts the second-largest economy in the eurozone, after Germany.

The USD/CHF is the pairing of the United States dollar and the Swiss franc. The Swiss franc became a safe-haven currency in times of crisis due to Switzerland’s history of remaining neutral in times of war. The franc remains a safe-haven currency and spikes in price can be seen during geopolitical crises.

The USD/JPY is the pairing of the United States dollar and the Japanese yen. The USD/JPY is one of the major pair types and is the second most traded pair in the world. Japan has the third-largest GDP after the United States and China. Since Japan’s economy is driven by its exports, the country prefers a weak yen to increase international sales.
  • #491
  • Edited 9:09am Jun 4, 2020 8:39am | Edited 9:09am
Another Divergence trade dotted lines This time,
let see where it goes.

Attached Image (click to enlarge)
Click to Enlarge Name: audusd thu4.png Size: 96 KB


Managed to get out with a small profit
this as broke the moving average too many times for my liking.
  • #492
  • Edited 9:11am Jun 4, 2020 8:46am | Edited 9:11am
Quoting redfan
Another Divergence trade dotted lines This time, let see where it goes. {image}
Maybe an idea for you to look at higher timeframe divergence and entering on a lower timeframe, that way the signal may hold more weight.
Just something for you to try.

Also some divergence indicator work better than others, for example MACD divergence as it is based on market momentum whereas CCI is an oversold / overbought indicator similar to RSI & Stochastics.

Attached Image (click to enlarge)
Click to Enlarge Name: Divergence entry.png Size: 102 KB
It never gets easier, you just get better
  • #493
  • Jun 4, 2020 10:14am Jun 4, 2020 10:14am
Quoting Shabs19
{quote} Maybe an idea for you to look at higher timeframe divergence and entering on a lower timeframe, that way the signal may hold more weight. Just something for you to try. Also some divergence indicator work better than others, for example MACD divergence as it is based on market momentum whereas CCI is an oversold / overbought indicator similar to RSI & Stochastics. {image}
Would you like to share that macd indicator?
I could try it on the 4-hour and use your suggestion of entering in the lower time frames,
p.s. I got out too soon Thinking it was going to go right through the moving average,

good trading
  • #494
  • Jun 4, 2020 3:47pm Jun 4, 2020 3:47pm
MAJOR PAIRS

The AUD/USD is the pairing of the Australian dollar and the United States dollar. The AUD/USD is considered one of the three most popular commodity pairs. Price action in this commodity pair is influenced by the price of Australia’s natural resources. In particular, the price of gold is known to correlate closely with AUD/USD.

The USD/CAD is the pairing of the United States dollar and the Canadian dollar. Canada’s economy is heavily dependent on exporting raw materials. As a result, the CAD’s strength correlates with the price of oil.

CROSS PAIR GUIDE
PAIRS THAT CORRELATE
AUD/USD, AUD/CHF, USD/CAD (CROSS)
  • #495
  • Jun 5, 2020 3:36am Jun 5, 2020 3:36am
Quoting redfan
{quote} Would you like to share that macd indicator? I could try it on the 4-hour and use your suggestion of entering in the lower time frames, p.s. I got out too soon Thinking it was going to go right through the moving average, good trading
Attached File(s)
File Type: ex4 MACD Divergence.ex4   39 KB | 221 downloads
It never gets easier, you just get better
  • #496
  • Jun 5, 2020 3:53am Jun 5, 2020 3:53am
Quoting Shabs19
{quote} {file}
thank you
  • #497
  • Jun 5, 2020 5:10am Jun 5, 2020 5:10am
UP AND RUNNING,
Attached Image (click to enlarge)
Click to Enlarge Name: FRI USD CHF.png Size: 116 KB
  • #498
  • Jun 5, 2020 7:42am Jun 5, 2020 7:42am
Close the trade out with a great profit

Attached Image (click to enlarge)
Click to Enlarge Name: fri usdchf22.png Size: 115 KB



That's one winning trade every day,
For last week using divergence
and the currency strength indicator.
  • #499
  • Jun 5, 2020 7:53am Jun 5, 2020 7:53am
Quoting redfan
Close the trade out with a great profit {image} That's one winning trade every day, For last week using divergence and the currency strength indicator.
30 PIPS PLUS ? Nice one. Get out at congestion or before NY Open.
It never gets easier, you just get better
  • #500
  • Edited 9:03am Jun 5, 2020 8:36am | Edited 9:03am
Quoting Shabs19
{quote} 30 PIPS PLUS ? Nice one. Get out at congestion or before NY Open.
My Take profit was set at 15
I was going to close the trade before USD Started releasing news at 1:30.
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