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AUDUSD/USDCAD pair trading: Is it possible? or martingale?

  • #21
  • Feb 28, 2023 4:16am Feb 28, 2023 4:16am
Quoting davelansing
{quote} Z-score relates to the degree of deviation of a dependent variable from its mean assuming a normal distribution of the dependent variable, but since price versus time is not normally distributed (due to kurtosis), a Z-score is not appropriate - but I have to defer to the hard-core stats folks. You're right regarding Amibroker, and I wrote this Correlation Plot to let me quantify the number of bars above/below a certain threshold (I generally use +/- 70 over a 100-bar period) as well as visualize the correlation over several years of data....
what are for you hard core stats? and instead of Z-score what to use?

what I have heard is that yes they monitor STD 2, 3, 4 and they average there...

at the end is like a bollinger band, if you average but you are against the trend end badly. That amibroker chart it's perfect, is cyclical

Anyone knows a MT5 or MT4 indicator that can do the same chart of amibroker? it is really helpful I think
in holiday till end of November
  • #22
  • Feb 28, 2023 4:24am Feb 28, 2023 4:24am
Quoting davelansing
{quote} not always the case. The AUDUSD/USDCAD neg. correlation can decouple (based on hourly and daily data analysis), hence the reason for the martingale trades. Anyone notice the 70% DD in early 2022?? This was due to a 2-month decoupling of the neg, correlation between the two pairs (see insert; "decoupling" is defined as the 100-day correlation <=70% (i.e., approaching 0) as evidence by the color of the correlation line shifting from red to yellow). There was also a 4-month decoupling of the correlation from the end of March 2021-end of July...
If in you 100 days chart the correlation is arrive to -54% how it is possible that here for example
https://www.myfxbook.com/forex-market/correlation. show still in the last month, week etc a correlation around -83%?

I was checking for days and never seen some strong change in this correlation
in holiday till end of November
  • #23
  • Edited 5:18am Feb 28, 2023 4:47am | Edited 5:18am
Quoting forexbali
{quote} If in you 100 days chart the correlation is arrive to -54% how it is possible that here for example https://www.myfxbook.com/forex-market/correlation. show still in the last month, week etc a correlation around -83%? I was checking for days and never seen some strong change in this correlation
My correlation algo is a rolling N-bar period...in the case of the plot shown in the previous post, N=100 bars (daily time frame), and my data set hasn't been updated since Feb 17th.

Importantly, MyFxBook doesn't indicate how many periods is used to calculate their correlation (i.e., how many bars is used to calculate the correlation on any given time frame). This will impact the correlation calculation.

As an example, attached are my plots for N=30 bars, N=20 bars, and N=10 bars (all on daily time frame). You can see the increase in frequency by which the negative correlation between the pairs decouples as the number of bars decreases - this is where the martingale will have the greatest negative impact on your account.

N=30 bars
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N=20 bars
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N= 10 bars
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  • #24
  • Feb 28, 2023 6:05am Feb 28, 2023 6:05am
Quoting davelansing
{quote} My correlation algo is a rolling N-bar period...in the case of the plot shown in the previous post, N=100 bars (daily time frame), and my data set hasn't been updated since Feb 17th. Importantly, MyFxBook doesn't indicate how many periods is used to calculate their correlation (i.e., how many bars is used to calculate the correlation on any given time frame). This will impact the correlation calculation. As an example, attached are my plots for N=30 bars, N=20 bars, and N=10 bars (all on daily time frame). You can see the increase in frequency...
And, do you have a method to trade this correlation stats?
in holiday till end of November
  • #25
  • Feb 28, 2023 6:18am Feb 28, 2023 6:18am
In Mataf website I found this, any good website to check statistics for who doesn't have windows or amibroker?
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in holiday till end of November
  • #26
  • Edited Mar 1, 2023 4:27am Feb 28, 2023 6:48pm | Edited Mar 1, 2023 4:27am
Quoting forexbali
{quote} And, do you have a method to trade this correlation stats?
You can Buy (or Sell) negatively correlated pairs such as USDCAD/AUDUSD or Buy/Sell (or Sell/Buy) positively correlated pairs like GBPUSD/EURUSD. Just be aware that their positive (or negative) correlation is not always "high", therefore I definitely wouldn't martingale losing trades. Look up the posts from former FF member "yazzie" - he hedge-traded GBPJPY against EURJPY and took $30,000 USD to $160,000 USD on a verified live account. Also, Waveskierrob does something very similar, and always posts his live trades. In fact, I believe that Waveskierrob's posts should be must reads considering most of the nonsense that is yakked about on this forum. Both of these guys trade small size relative to their bankroll, they hedge, and most importantly they go against the conventional "wisdom" and allow losers to run, open multiple trades to average out a losing position, and wait (i.e., patience) for weeks and months until the market turns and their once-losing trades become profitable (while banking profits on the hedge trades).

Good luck.
  • #27
  • Feb 28, 2023 7:25pm Feb 28, 2023 7:25pm
Quoting forexbali
In Mataf website I found this, any good website to check statistics for who doesn't have windows or amibroker?
I went to the Mataf website and there was no mention of the number of bars used to calculate the correlations on the various time frames.
  • #28
  • Feb 28, 2023 9:26pm Feb 28, 2023 9:26pm
AUD stronger on the CPI news, still early in the day however

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It takes a lot for me to IGNORE you, but you can try.
  • #29
  • Edited 3:49am Mar 1, 2023 3:31am | Edited 3:49am
Quoting davelansing
{quote} I mean you can Buy (or Sell) negatively correlated pairs such as USDCAD/AUDUSD or Buy/Sell (or Sell/Buy) positively correlated pairs like GBPUSD/EURUSD. Just be aware that their positive (or negative) correlation is not always "high", therefore I definitely wouldn't martingale losing trades. Look up the posts from former FF member "yazzie" - he hedge-traded GBPJPY against EURJPY and took $30,000 USD to $160,000 USD on a verified live account. Also, Waveskierrob does something very similar, and always posts his live trades. In fact, Waveskierrob's...
thank you, in which forum/thread they post? found the second, yazzie seem doesn't post since 2017
in holiday till end of November
  • #30
  • Mar 1, 2023 4:29am Mar 1, 2023 4:29am
Quoting forexbali
{quote} thank you, in which forum/thread they post? found the second, yazzie seem doesn't post since 2017
Waveskierrob posts mainly in the GBPUSD thread, but he has a thread where he describes his trading approach in detail.

Hedging/averaging trades without prediction | Forex Factory
  • #31
  • Mar 1, 2023 4:08pm Mar 1, 2023 4:08pm
Closed both just before the US session

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It takes a lot for me to IGNORE you, but you can try.
  • #32
  • Mar 2, 2023 9:41am Mar 2, 2023 9:41am
AUDUSD and USDCAD are trading-convenient pairs so you can trade them. These pairs carry comparatively narrow trading spread and less volatile than XAUUSD. But before trading, keep the issue of ongoing USD inflation in your mind.
  • #33
  • Mar 2, 2023 10:43am Mar 2, 2023 10:43am
Quoting Erebus
Closed both just before the US session {image}{image}
thanks for posting the charts! this indicator fxpower seem really helpful, since I'm focus on forex and I made huge progress in the past 2 weeks,
I really don't need any indicator, I just focus on chart, and I use a bollinger band just as idea of expansion of volatility and some time as support and resistance, pivots just to have an idea if others are watching, 200 ema, just to use as support resistance in pullbacks, but really can't help rsi, macd etc,

I'm a scalper, so just to get an idea, but now that I understand the entries on 15M charts, also if I look at 1H or 4H for some entry with good risk reward ratio, I don't mind to look at indicators I just focus on chart and the highest chance of risk reward ratio to choose from 1:3 up to 1:xx
in holiday till end of November
  • #34
  • Mar 3, 2023 2:45am Mar 3, 2023 2:45am
Which risk reward ratio would you use on USDJPY on this short you that follow this fx trends tools?

1:3 1:4 1:5 in the chart is 1:5 or more?
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in holiday till end of November
  • #35
  • Edited 2:33am Mar 10, 2023 2:11am | Edited 2:33am
Hello, the guy is with 100 lots now in, I think long AUDUSD and short USDCAD

I have seen in few hours the profit loss from -15000 to -55000, I suppose he has around 100 lots long AUDUSD and 100 lots short USDCAD

can you show me the charts on Amibroker, which is the situation and with fx trend power?
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in holiday till end of November
  • #36
  • Mar 10, 2023 4:22am Mar 10, 2023 4:22am
I see swing entry here on 1H 4H and this attached daily chart 1:5 RR
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in holiday till end of November
  • #37
  • Mar 10, 2023 8:04am Mar 10, 2023 8:04am
AUDUSD went up, made target with swing 1H

him from -55K to +15K closed in profit.

Would be interesting to see the charts of Amibroker fxtrend etc...
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in holiday till end of November
  • #38
  • Mar 12, 2023 10:26am Mar 12, 2023 10:26am
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in holiday till end of November
  • #39
  • Apr 11, 2023 8:34am Apr 11, 2023 8:34am
I added in trading view this indicator for FX (World Broker FX the name of the script)

anyone can compare it to fx power and fx trend and give me an opinion?
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in holiday till end of November
  • #40
  • May 28, 2025 9:49pm May 28, 2025 9:49pm
Quoting RossP
i Follow AUDUSD And USDCAD. Trading AUDUSD, when USDCAD is Trading down AUDUSD is trading up. They run in the opposite direction to each other. It always works.
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