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Attachments: Zeusjoes Market-Neutral Hedge Strategy
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Zeusjoes Market-Neutral Hedge Strategy

I think this the same system...

It is a matter of finding a good way of spread widening and take respective long and short calls.

regards,
vip
hi,
can someone just check that i understand this system correctly. basically, we look at two pairs that are positively correlated. like for example, eurjpy and gbpjpy. If the spread between the prices of two increases considerably then we sell the one thats doing good and long the other one.

can someone tell me which indicator on this thread works the best in finding the spread and allows you to look at historical spreads?

Thanks.
Well, that is exactly the question we all have been working from post #1 !!

You are welcome to contribute and help as well.

The original ZeusJoe "indicator" was a demo account. Yep. He bought one, sold the other, and watched his net profit in the demo platform. Nothing fancy. If you look at the math, all that is showing us is pip by pip the net movement of the two strategies, from a given "ZeroPoint", or time. So Josef, nothing happend to the original method... it is what we are talking about and pursuing!! We are just addressing the math and methodology, that's all.

But that brought many questions. When do you take your demo positions? When do you enter? When do you exit...??

Is there an indicator that we can put on our trading platform to "see" this movement??... and that has given rise to a lot of contribution by SwingMan, Magic Trader, Guess and others... (heck, I even tossed in perhaps the simplest indicator of all, pure price difference between the currencies!!)

So we are getting there. It takes time to develop a system, especially when such "radically" new indicators are required... ultimately, it is hoped a workable EA can result, but the first step is to develop a quantitative way to represent the "two positions of ZuesJoe", define repeatable entry/exit rules for all market types, and code the effort.

Please stick around and help us!!
Hi, isn't the net profit he looks at directly proportional to the difference of the two prices? If yes, why can't we just use your indicator that shows the difference and just see how it moved with price recently so we know when to open positions. Can u tell me what post has this indicator pls?

Quoting mrkam
Well, that is exactly the question we all have been working from post #1 !!

You are welcome to contribute and help as well.

The original ZeusJoe "indicator" was a demo account. Yep. He bought one, sold the other, and watched his net profit in the demo platform. Nothing fancy. If you look at the math, all that is showing us is pip by pip the net movement of the two strategies, from a given "ZeroPoint", or time. So Josef, nothing happend to the original method... it is what we are talking about and pursuing!! We are just addressing the math and methodology, that's all.

But that brought many questions. When do you take your demo positions? When do you enter? When do you exit...??

Is there an indicator that we can put on our trading platform to "see" this movement??... and that has given rise to a lot of contribution by SwingMan, Magic Trader, Guess and others... (heck, I even tossed in perhaps the simplest indicator of all, pure price difference between the currencies!!)

So we are getting there. It takes time to develop a system, especially when such "radically" new indicators are required... ultimately, it is hoped a workable EA can result, but the first step is to develop a quantitative way to represent the "two positions of ZuesJoe", define repeatable entry/exit rules for all market types, and code the effort.

Please stick around and help us!!
Hello Eagle_eye,

everything will be easy if we will always picks tops and bottoms. In this strategie is the same. There is no guarantee that we will have some profit looking only which pair is overperformer and which is underperformer because it doesn't have to change. There could be all days that one pair will be overperform and second underperform and if your entry was too early (which you don't know at the beginning) then you will loosing. Now we know that our gains depends of cross pairs movements in maybe 90%. So point is, how do know which pair overperforming is ended and which underperforming is ended. In summary we are trying to predict where will cross pair go looking at connetions between two pairs.
Anyone know why my overlay is looking out of sync?

I am using the very first indicator that came out on this thread, with time and date.

Thanks,
Vip
Attached Image (click to enlarge)
Click to Enlarge Name: test.gif Size: 14 KB
that's right. Theres no way to know for sure, you just use the indicator and
look at previous times.

Quoting magictrader
Hello Eagle_eye,

everything will be easy if we will always picks tops and bottoms. In this strategie is the same. There is no guarantee that we will have some profit looking only which pair is overperformer and which is underperformer because it doesn't have to change. There could be all days that one pair will be overperform and second underperform and if your entry was too early (which you don't know at the beginning) then you will loosing. Now we know that our gains depends of cross pairs movements in maybe 90%. So point is, how do know which pair overperforming is ended and which underperforming is ended. In summary we are trying to predict where will cross pair go looking at connetions between two pairs.
Hi fellow traders,

I have made a new indicator which shows the price difference between 2 pairs on a daily basis. The daily cycle is divided into 2 colors.

Every day at the starting hour the indicator starts with a price difference of zero. In this way you can see the divergence on a daily basis.

Have a try.
Attached Image (click to enlarge)
Click to Enlarge Name: pricedivergenceindicator.gif Size: 12 KB
Attached File(s)
File Type: ex4 #PH#PriceDivergence#01.ex4   6 KB | 1,040 downloads
Nice. I'll check out if we can add BBs to the Indicator to get a sense of StdDev.
Quoting guess121
Anyone know why my overlay is looking out of sync?

I am using the very first indicator that came out on this thread, with time and date.

Thanks,
Vip
Set the date further in time, like end of July, but it also, as it seems, depends on TF.
Hello,

fewhills

Thank you for your indicator.
I have a question, how can we change the green ad that appears as they are with you, lower right corner.
fewhills, I like your indicator. As I write, E/J is nearly +3 standard deviations above median line on hrly chart with 5 day look back on Linear Regression Channel. G/Y is between -1 standard deviation and the median line on same time frame with same look back period. Linear Regression Channell will clearly identify the overperformer/underperformer of the pairs. The E/J upward spike is the cause of current de-correlation. To arbitrate these pairs E/J should be sold and G/J should be bought, but only if current de-correlation is statistically significant. Can you program current LRC values of the pairs into your indicator? This will identify which of the pairs is to be bought, and which is to be sold. In short, what to trade. As to statistical significance of de-correlation...can you program LRC over your Price Divergence bars? With this addition we will better be able to determine statistically significant de-correlations. In short, when to trade. Pippo
Vincit qui se vincit.
Quoting aleks760
Hello,

fewhills

Thank you for your indicator.
I have a question, how can we change the green ad that appears as they are with you, lower right corner.
I don't quite understand your question aleks760. What do you want to do with it?
Quoting Pippopotamus
fewhills, I like your indicator. As I write, E/J is nearly +3 standard deviations above median line on hrly chart with 5 day look back on Linear Regression Channel. G/Y is between -1 standard deviation and the median line on same time frame with same look back period. Linear Regression Channell will clearly identify the overperformer/underperformer of the pairs. The E/J upward spike is the cause of current de-correlation. To arbitrate these pairs E/J should be sold and G/J should be bought, but only if current de-correlation is statistically significant. Can you program current LRC values of the pairs into your indicator? This will identify which of the pairs is to be bought, and which is to be sold. In short, what to trade. As to stastical significance of de-correlation...can you program LRC over your Price Divergence bars? With this addition we will better be able to determine stastically significant de-correlations. In short, when to trade. Pippo
Pippopotamus, could you show me some screenshots of your LRC examples?
I will try. Must figure out how. I don't use MT4 for this.
Vincit qui se vincit.
I use Quotetracker for charting. Getting messege when I try upload...invalid file type. May I e-mail you the examples?
Vincit qui se vincit.
ok excellent - will give that a try.

Quoting fewhills
Set the date further in time, like end of July, but it also, as it seems, depends on TF.
Quoting Pippopotamus
I use Quotetracker for charting. Getting messege when I try upload...invalid file type. May I e-mail you the examples?
You can try by zipping it first.
Be back later (several hours). Will learn how to make zip file.
Vincit qui se vincit.
Hi,

Can someone please see why this indicator does not work on a 5 min TF, it works ok on a 60min TF.

Thanks
Vipul
Attached File(s)
File Type: mq4 OverLayChart -Point-Time.mq4   9 KB | 749 downloads
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