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Zeusjoes Market-Neutral Hedge Strategy

  • #441
  • Jul 29, 2008 6:55am Jul 29, 2008 6:55am
Quoting toddanderson
What percent change do you use for entering ?
How do you tell buy or sell the pair ?
are you using some type of percent indicator ?

it is just ordinary daily change in percentage..u can see in website below or other website..

http://www.cnbc.com/id/15839178

For example:

EUR/USD = -0.15%
GBP/USD = -0.45%

u can tell that GBP/USD is far weaker than EUR/USD...so you buy GBP/USD and sell EUR/USD...
  • #442
  • Jul 29, 2008 7:03am Jul 29, 2008 7:03am
what difference in % is good for you to trade? 0.3% and larger? Do you add some positions when that difference is getting wider? And when you close your positions, when diff is e.g. 0,0% between two pairs?

Sorry for a lot of qestions but this way of trading is also interesting .
  • #443
  • Jul 29, 2008 7:11am Jul 29, 2008 7:11am
i just use this method for 3 days..so i really can not suggest any certain number...so far, i use : GBP/USD - EUR/USD >=0.2% or GBP/USD - EUR/USD<=-0.2%...

i use +/- 0.2% because i want to enter the market everyday...much larger will be much safer but you have to wait longer...

Anyway, this is still premature idea and need a lot of improvement & research..i will have a lot to tell after 2 months..
  • #444
  • Jul 29, 2008 7:17am Jul 29, 2008 7:17am
Quoting magictrader
what difference in % is good for you to trade? 0.3% and larger? Do you add some positions when that difference is getting wider? And when you close your positions, when diff is e.g. 0,0% between two pairs?

Sorry for a lot of qestions but this way of trading is also interesting .
nope i dont add extra position..
yap..i close when the diff is 0,0% or i got 15 pips.....it is enough considering i enter the market everyday..
  • #445
  • Jul 29, 2008 8:33am Jul 29, 2008 8:33am
Thank you for your response

my stupid question is why are you buying a weaker currancy and selling
a stronger one.
sorry for the question but i am new at this

Thank you


Quoting Andrie
it is just ordinary daily change in percentage..u can see in website below or other website..

http://www.cnbc.com/id/15839178

For example:

EUR/USD = -0.15%
GBP/USD = -0.45%

u can tell that GBP/USD is far weaker than EUR/USD...so you buy GBP/USD and sell EUR/USD...
  • #446
  • Jul 29, 2008 8:34am Jul 29, 2008 8:34am
Quoting Andrie
i just use this method for 3 days..so i really can not suggest any certain number...so far, i use : GBP/USD - EUR/USD >=0.2% or GBP/USD - EUR/USD<=-0.2%...

i use +/- 0.2% because i want to enter the market everyday...much larger will be much safer but you have to wait longer...

Anyway, this is still premature idea and need a lot of improvement & research..i will have a lot to tell after 2 months..
Andrie,

I am not sure how you are getting your percentage....Could you give us an example of each?

Thanks.

Bruce
  • #447
  • Jul 29, 2008 8:43am Jul 29, 2008 8:43am
Quoting toddanderson
Thank you for your response

my stupid question is why are you buying a weaker currancy and selling
a stronger one.
sorry for the question but i am new at this

Thank you
This thread is all about buying weaker and selling stronger . That's the general idea that somewhere in the future between correlated pairs again will be balance, and there is our gain. Like Zeusjones said we're buying underperformer and selling overperformer. Question is, how most accurate measure it.
  • #448
  • Jul 29, 2008 8:44am Jul 29, 2008 8:44am
Quoting toddanderson
Thank you for your response

my stupid question is why are you buying a weaker currancy and selling
a stronger one.
sorry for the question but i am new at this

Thank you
it is already stated in Zeusjoes first post in this thread. The idea is both pairs will move in the same direction as they are correlated. So in example above, it is either GBP/USD will go higher to chase EUR/USD or EUR/USD will fall following GBP/USD...
  • #449
  • Jul 29, 2008 8:49am Jul 29, 2008 8:49am
Quoting brucech
Andrie,

I am not sure how you are getting your percentage....Could you give us an example of each?

Thanks.

Bruce
I am sorry.I dont understand your question. English is not my first language and i always have a bad mark in english class..

ehm..let see if i am not mistaken your question:

GBP/USD = -0.45%
EUR/USD = -0.15%

So following the formula, GBP/USD - EUR/USD = (-0.45%)-(-0.15%) = -0.3% ..because -0.3% < than -0.2% , you enter the market...

is that your question about??
  • #450
  • Jul 29, 2008 8:52am Jul 29, 2008 8:52am
Quoting magictrader
Question is, how most accurate measure it.
exactly...i guess we should backtested it....but i dont have any idea how to do it..
  • #451
  • Jul 29, 2008 8:54am Jul 29, 2008 8:54am
Quoting Andrie
it is already stated in Zeusjoes first post in this thread. The idea is both pairs will move in the same direction as they are correlated. So in example above, it is either GBP/USD will go higher to chase EUR/USD or EUR/USD will fall following GBP/USD...
I've never understood using G/U-E/U rather than E/J-G/J.

The correlation for EUR/JPY-GBP/JPY is 94% and is 74% for GBP/USD-EUR/USD.

A deviation between the JPY pairs is a lot more meaningful and certain to correct than between the USD pairs.
  • #452
  • Jul 29, 2008 8:58am Jul 29, 2008 8:58am
Quoting Andrie
I am sorry.I dont understand your question. English is not my first language and i always have a bad mark in english class..

ehm..let see if i am not mistaken your question:

GBP/USD = -0.45%
EUR/USD = -0.15%

So following the formula, GBP/USD - EUR/USD = (-0.45%)-(-0.15%) = -0.3% ..because -0.3% < than -0.2% , you enter the market...

is that your question about??
Andrie,

Right on! That answers my question.

Thanks

Bruce
  • #453
  • Jul 29, 2008 9:00am Jul 29, 2008 9:00am
Quoting billbss
I've never understood using G/U-E/U rather than E/J-G/J.

The correlation for EUR/JPY-GBP/JPY is 94% and is 74% for GBP/USD-EUR/USD.

A deviation between the JPY pairs is a lot more meaningful and certain to correct than between the USD pairs.
you are right...actually i am trading both...
  • #454
  • Jul 29, 2008 9:14am Jul 29, 2008 9:14am
I do think there would be better oportunities in EJ/GJ too, but i found the indicators we are using are MUCH more reliable applied to EU/GU. Donīt know why it works better on them but the "delta" or "hedge range" is almost exactly the amount of pips won, when it gets back to zero. On EJ/GJ I had a trade -50 pips while indicator showed "range" decreased by 30 pips or so. So i feel much safer trading EU/GU but would love to use EJ/GJ too.
  • #455
  • Jul 29, 2008 10:33am Jul 29, 2008 10:33am
Hi friends,

I'm not sure if mrkam is banned, or just suspended temporarily.

I hope not banned. I think he was cited for violation of "Rule #3: No Forum Promotion"

The rule states:

"Promotional agendas tend to compromise the integrity of forum discussions and are therefore not permitted.* If you make money by servicing Forex traders in any way, shape, or form, you are NOT permitted to post in the forums unless you have prior approval. If you attempt to use the forums as a promotional tool you will be banned without warning!

I don't see what mrkam did as promoting a product, but that's just my opinion.

Hopefully the mods will reconsider.

Good luck, mrkam.
  • #456
  • Jul 30, 2008 4:55am Jul 30, 2008 4:55am
Quoting SwingMan
Thanks Andrew for your note !

I have programmed the normalized divergence (with Bollinger Band 20, 2), and the RSI for this oscillator.
You can try this tools. I think that the trading informations are very good.
For oscillator values above 2-3 StdDev, crossing the BB, and RSI under 30 or 50, the long signals are very clear (maybe clearer as from the nacked price differences).
.
SwingMan, You are the best as usually.
Thanks for normalized div indicator.
You ask me how I trade it. As I wrote I used it some times ago (now I trade mainly directionaly not pairs).

So I use this normalized div above / below 2.5 (sometimes 3, sometimes 2) as warning that reversal in pair is comming. Next I look at price to see some sign of reversal, it could be double top/bottom, some candlestick patterns like doji, hammer, engulfing bar etc. I use also moving avg simple 200 (lime), 75(red) , 21 (yellow) and 8 ema (white). Usually wait at least as price close above/below 8 ema and see if is not to closely to another MA especialy 200.
If there is a trend normalized div could give signal to early - one should confirm it with price or another sign of reversal.
In picture below is an example. Red vertical line is at position normalized div is bellow 2.5 but there is a trend and we should wait until yelow vertical line (double bottom and close abowe 8 ema) or white line (close above 21 sma).

Once again thank You SwingMan for many very good EA and indicators You posted on this and another forums.

Regards,

Andrew
Attached Image (click to enlarge)
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  • #457
  • Jul 30, 2008 5:35am Jul 30, 2008 5:35am
Quoting Andrew_e
You ask me how I trade it. As I wrote I used it some times ago (now I trade mainly directionaly not pairs).
Andrew - many, many thanks for your response.
If you have time, please give us more comments on current charts and our indicators!
  • #458
  • Jul 30, 2008 6:33am Jul 30, 2008 6:33am
Quoting Andrew_e
SwingMan, You are the best as usually.
Thanks for normalized div indicator.
You ask me how I trade it. As I wrote I used it some times ago (now I trade mainly directionaly not pairs).
Andrew
How do you know which one of the pair is going to revert to the others level of gain/loss?
Good Trading
  • #459
  • Jul 30, 2008 7:58am Jul 30, 2008 7:58am
I actually just took my last trade based on visually seeing the dip on SwingMan's LogPriceDifference indicator. On the chart I saw that the indicator went significantly below the "short" line (I caught it a little late) so I entered with a Buy of GBPUSD.

Then I basically just waited for an acceptable profit, which was $688 USD.

I'm now trying the #PH#HedgeAndTP#09 EA to close my positions automatically with a predetermined profit.

I am now also watching the NeutralPrice Oscillator_v1 to see how that helps.

-
Attached Image (click to enlarge)
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  • #460
  • Jul 30, 2008 1:50pm Jul 30, 2008 1:50pm
Hi,
to only excuse for my bad English.
What think you fend off an indicator which consists of two Lagueren (one for each pair) Perhaps a good entrance help?
SwingMan what do you think about it?
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