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  • #47,581
  • Nov 30, 2008 3:18pm Nov 30, 2008 3:18pm
These twp pairs are negatively correlated and I always check USD/CHF before opening or closing trades in Euro.

I was first told this by a Professional City Trader and have followed the 2 pairs constantly.

Sun Trader you should read article Doblece posted - here's snippet:

"in getting into the forex market, there is one relationship of which you must be aware before you even start trading. This is the relationship between the euro and the Swiss franc currency pairs - a correlation too strong to be ignored. In the article Using Currency Correlations To Your Advantage, we see that the correlation between these two currency pairs can be upwards of negative 95%. This is known as an inverse relationship, which means that - generally speaking - when the EUR/USD (euro/U.S. dollar) rallies, the USD/CHF (U.S. dollar/Swiss franc) sells off the majority of the time and vice versa. When you're dealing with two separate and distinct financial instruments, a 95% correlation is as close to perfection as you can hope for."

This correlation is far stronger than any other pair.
  • #47,582
  • Nov 30, 2008 3:35pm Nov 30, 2008 3:35pm
Currently short In the eurusd candle low brake...already took 90 percent profits and now trailing with previous daily candles high...

I am short from 1.2818

Attached Image (click to enlarge)
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  • #47,583
  • Nov 30, 2008 3:36pm Nov 30, 2008 3:36pm
Quoting tamster
These twp pairs are negatively correlated and I always check USD/CHF before opening or closing trades in Euro.

I was first told this by a Professional City Trader and have followed the 2 pairs constantly.

Sun Trader you should read article Doblece posted - here's snippet:

"in getting into the forex market, there is one relationship of which you must be...
Thank u for clarify this for them.
Mostly swissy is more volatile than fiber(about 10% more) also react first when breakout occurs.
  • #47,584
  • Nov 30, 2008 3:42pm Nov 30, 2008 3:42pm
Quoting tamster
This correlation is far stronger than any other pair.
Indeed.
However, Suntrader has an indicator (see post 47521) which is showing an average negative correlation factor of only 0,57 for the last 5 months, approximatively since when big eurusd downtrend started (and big usdchf uptrend as well, simultaneously...).

This is most probably because, while euro moved about 3710 pips, usdchf only moved a little above half this amount (circa 2029 pips), thus, a little above 50% negative correlation (-0,57). There has obviously not been such a high correlation as we've been accustomed to (average -0,94 overall the last two years - see Oanda's correlation tables for eurusd below) during these months that are being taken into account in his chart, and especially last month (november) (-0,55).

It is interesting to note that eurusd negative correlation to usdcad is barely below usdchf's... and silver positive correlation to this pair slightly higher than gold's...
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  • #47,585
  • Nov 30, 2008 3:53pm Nov 30, 2008 3:53pm
Quoting tamster
These twp pairs are negatively correlated and I always check USD/CHF before opening or closing trades in Euro.

I was first told this by a Professional City Trader and have followed the 2 pairs constantly.

Sun Trader you should read article Doblece posted - here's snippet:

"in getting into the forex market, there is one relationship of which you must be aware before you even start trading. This is the relationship between the euro and the Swiss franc currency pairs - a correlation...
Investopedia info is from 2005 and in it in reference to another pair says:

"Yet correlations do not always remain stable. Take USD/CAD and NZD/USD, for example. With a coefficient of -0.94, they had a strong negative correlation over the past year, but the relationship deteriorated over March 2005 for a number of factors, including the Reserve Bank of New Zealand's intentions to resume rate hikes, and political instability in Canada".

Which my charts below show same thing happening to EUR/USD vs USDCHF. Notice 2005 is at or very close to -1 and now this year flucuates between 0 and -1 and currently at -057. Note very faint line on indicator is -0.7 to give you an idea that from that level down to bottom of chart (-1.00 ) would be be extremely reverse correlated:
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  • #47,586
  • Nov 30, 2008 3:54pm Nov 30, 2008 3:54pm
I am still learning Price Action ( a few years to go i think) and started having a look at the monthly chart and all history that I have to try and find a possible long term direction.

The purple line are the highest and lowest prices.

So where do we go from here ?

Cheers

Kiwi
Attached Image (click to enlarge)
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  • #47,587
  • Nov 30, 2008 4:03pm Nov 30, 2008 4:03pm
Quoting tamster
These twp pairs are negatively correlated and I always check USD/CHF before opening or closing trades in Euro.

I was first told this by a Professional City Trader and have followed the 2 pairs constantly.

Sun Trader you should read article Doblece posted - here's snippet:
...
But if they are correlated how does that help you? Do you really know which one is following the other? Or are they both following something else?And if it is the dollar they are following, why not just stick to one pair instead of two?
  • #47,588
  • Nov 30, 2008 4:11pm Nov 30, 2008 4:11pm
Quoting Kiwi06
So where do we go from here ?
Good question...
Up and down all over the middle range?
Attached Image
  • #47,589
  • Nov 30, 2008 4:17pm Nov 30, 2008 4:17pm
Morning Guy´s
The best thing that can happen to you is to find out where you're wrong.
  • #47,590
  • Nov 30, 2008 4:17pm Nov 30, 2008 4:17pm
Quoting TradeWell
But if they are correlated how does that help you? Do you really know which one is following the other? Or are they both following something else?And if it is the dollar they are following, why not just stick to one pair instead of two?
Except for those who are hedging long in both (which, given the recent higher volatility in eurusd would be giving losses) I would say that sometimes one of those pairs can be having a clearer PA so by keeping an eye on what usdchf is doing, for example, we could "predict" the following moves on eurusd...

If it was euro going up and usdchf going down, with the same correlation index, hedging on the whole move would have given about 1700+ pips (+ the swaps + the pip differential between pairs (1,00 eurusd - 0,80 usdchf).
  • #47,591
  • Nov 30, 2008 4:19pm Nov 30, 2008 4:19pm
EURUSD Dec'01 - '05 2008 Weekly

Simulation results:

Open:1.27115
High:1.28106
Low:1.22637
Close:1.27212

http://www.forex-tsd.com/blogs/owg/
  • #47,592
  • Nov 30, 2008 4:25pm Nov 30, 2008 4:25pm
Quoting TradeWell
But if they are correlated how does that help you? Do you really know which one is following the other? Or are they both following something else?And if it is the dollar they are following, why not just stick to one pair instead of two?
Of course.
Swissy was way below parity making LLs all the time suggest further downmove action while eu in the exact time have been made double top on losing momentum.

This was pretty clear sign of reversal and excelent bottom in swissy for mine.
  • #47,593
  • Nov 30, 2008 4:38pm Nov 30, 2008 4:38pm
I just believe in whirled peas and that we should all correlate to everything as this chart shows.

((Psi is probably going to to try and find a gap to trade in there somewhere...))
Attached Image
FUBAR...
  • #47,594
  • Nov 30, 2008 4:45pm Nov 30, 2008 4:45pm
Quoting ak4x
I just believe in whirled peas and that we should all correlate to everything as this chart shows.

((Psi is probably going to to try and find a gap to trade in there somewhere...))

good one
  • #47,595
  • Nov 30, 2008 4:51pm Nov 30, 2008 4:51pm
Quoting ak4x
I just believe in whirled peas and that we should all correlate to everything as this chart shows.

((Psi is probably going to to try and find a gap to trade in there somewhere...))
all gaps were filled...no trade
Different opinions highly valued, ignorant to slander.
  • #47,596
  • Nov 30, 2008 4:53pm Nov 30, 2008 4:53pm
Quoting psiholog
all gaps were filled...no trade
Yep! A quick easy 4 pips over here!












  • #47,597
  • Nov 30, 2008 5:02pm Nov 30, 2008 5:02pm
you want gaps real time though..well lets analyze the current chart since friday on the 15m timeframe. There were several gaps which did not get filled. The last true one was never tapped but is currently acting as resistance (black line). If we break above that one..im inclined to believe that all the other ones will get filled as well. No break of that first one...here comes new lows as it would be a "breakaway" gap. Currently i believe the downtred will continue for 24 hours at least as opec did not cut production and i expect a big selloff in the ny stock market tommorow after 5 days straight of wins...the last 3 on light volume and no real intent to go much higher

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Different opinions highly valued, ignorant to slander.
  • #47,598
  • Nov 30, 2008 5:05pm Nov 30, 2008 5:05pm
Quoting psiholog
you want gaps real time though..well lets analyze the current chart since friday on the 15m timeframe. There were several gaps which did not get filled. The last true one was never tapped but is currently acting as resistance (black line). If we break above that one..im inclined to believe that all the other ones will get filled as well. No break of that first one...here comes new lows as it would be a "breakaway" gap. Currently i believe the downtred will continue for 24 hours at least as opec did not cut production and i expect a big selloff...
never expect a gap to be filled... or a sell off to happen because of something you made in your mind... because then it won't happen...
  • #47,599
  • Nov 30, 2008 5:09pm Nov 30, 2008 5:09pm
IBFX may open trading at 6pm est but their spreads say...

"Don't plan on trading for the first half hour or more..." .

GU = 19 pips
GY = 21
EJ = 15
EU = 9-14
UJ = 14

And those have actually come down a few since the open 6 minutes ago. Borkers...
FUBAR...
  • #47,600
  • Nov 30, 2008 5:11pm Nov 30, 2008 5:11pm
Quoting emda
never expect a gap to be filled... or a sell off to happen because of something you made in your mind... because then it won't happen...
it is not something in my mind..it is something i have observed time and time again. 5 daily bull candlesticks is a pattern commonly repeated. It goes like this...3bull then 1 bear....5bull then 1 or 3 bear....8 bull then 1-3-5 bear. To go all the way to 8 daily bull candlesticks is a sign of a very strong bull market and if you think we are witnessing one...well you are one step ahead of me. As far as gaps go...i went into full detail last week as how those work...the only things i will repeat is "common" gap and "breakaway" gap...one happens 75% of the time while the other 25% of the time...making the distinction between the two is heavily dependent on pa and what kind of market it is..rangy...bear trend/bull trend..etcetera
Different opinions highly valued, ignorant to slander.
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