Anyone Really Into Correlation?

Correlations are somewhat of a misnomer. The correlation equation only looks at correlation for a given period of time. There is an assumption that pairs move in or out of correlation, they snap back. That is true sometimes, but many times they pull apart and stay a part, sometime forever.

Because of that, I look at baskets of trades and correlations are just one aspect. they other is overlaying profit and price action, Creating Extreme Centers of gravity and always trade in the direction of the basket trend.

All currency pairs are mathematically connected to each other. It's crucial to know what you really trade. A currency pair actually includes two markets, the base and the quote currency.

Here is my latest Basket trader console that Ive created. So far, so good. Uses a backend API connected to MT4.

Interesting approach. If I understand it correctly, the chart shows the equation of buy AUDNZD and buy EURCHF and buy GBPJPY and buy USDCAD. Or in terms of currencies: Buy AUD, EUR, GBP, USD, and sell NZD, CHF, JPY, CAD.
In the list I see some combinations they don't make sense to me. For example buy CADJPY and sell EURJPY. This takes out JPY and can be replaced by sell EURCAD.

Nope, it actually analyzes correlations, short term and long term on the previous tab. Then you build a fake basket, look at the basket over all, profit, lot sizes, equity curve..(among other things) Then decide what your basket will look like if you go live. The basket will change several times daily. basically, the goal is to create new life with the fewest pairs, redundant pairs, least spread. There are almost 1000 pair combinations times how many combos in the basket. Dont get caught up on what pairs are in the basket.. The example I show is not real, just junk pairs. Also might add, sometimes you want the combos to be correlated.. but there is lots of music in UN correlated pairs. UN correlated pairs can create intentional noise. This is the basic idea. Its about 8000 lines of code.. Been working on this for years, starting to come together. This code is the work of about 3 months.

Here is different version, Different way to form baskets.