DislikedCorrlation doesn't mean, what you seem to think it does.
See my last post.Ignored
Tokyomaster, I'm not familiar with IForce. Care to share?
These charts are nothing more than one currency superimposed on another. The scales are different & they only APPEAR to be one on top of the other. We asked the MT-4 program to do that for us & it does exactly that.
The ILLUSION shows tendencies of each currency relative to their correlation to each other. They may not really be one one top of the other. Nor may their respective ATR be even close.
Wheather these pairs are seperated, crossing, or converged is only an ILLUSION. But paints a clear picture of their relationship to each other.
We're trading the tendency here, and the likelyhood that that tendancy will continue & repeat.
We can normalize the pairs through lot size, so that movement, of anticipated movement is equal. For instance the ATR difference between EUR-USD & USD is generally known to be 1.5 : 1. But yesterday I figured the difference at 1.26 :1 & traded accordingly & successfully.
Take EUR-JPY & GBP-JPY, with a 85% correlation factor. EUR is 1.4 to GBP. Look at EUR-JPY & AUD-USD. CF is 89% But the ATR factor is something like 4:1 or something like that. We need to use our position sizing such that we can establish a level playing field & double our chance that these pairs are going to do what we need them to do within the time we want it done.
I think the key to these charts is to always remember that they aren't the truth, but are representative it WHEN PRESENTED IN RELATION TO EACH OTHER. We can't just blindly trade from the superimposed charts. We need to do a lot of other work to justify our intended action. The superimposed chart is merely the PRIMER. Get's our attention. We need to do the rest.
For me, this is no different than trading Index Option spreads from 20 years ago, so, once I cast my eyes on this chart superimposing indicator, I was good to go in about 3 minutes. And there's no time decay, no delta, no nothing. A pip is a pip is a pip is a pip. Can't get any better.
Now if only Barack the Ever-so-Benevolent doesn't give away the ranch more so than he already has at the G-20. He could give them all of the US cash....it's worthless anyway. Thanks for nothin Barry...you too GeorgeII.
It would be just about right that I finally wrap my arms around a reliable trading method & learn how to use it & profit from it when no sooner comes the US Forex Cops to raid my house & declare martial law for the sake of a Green Planet & of course for the Children & force all Forex Traders to go get a real job so that all the layabouts can afford more beer cigaretts & lottery tickets. Costa Rica looks better & better all the time!