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Hedge and Correlation Strategy

  • #361
  • Jul 25, 2009 10:42am Jul 25, 2009 10:42am
Quoting brucech
Dreamliner,

Very nice increase.
If it is not too much to ask, could you post your charts for these like you did before with the overlay and entries and exits?

Thanks

Bruce
Sorry, I said I'd post charts this week and I didn't. Attached is a spreadsheet with all my trading activity this week. I had to calculate all of the PL by hand, so feel free to double check it.

Thanks
Attached File(s)
File Type: xls FX Transaction History - Week of July 20.xls   30 KB | 832 downloads
  • #362
  • Jul 25, 2009 10:59am Jul 25, 2009 10:59am
Quoting girdle66
Sorry, I said I'd post charts this week and I didn't. Attached is a spreadsheet with all my trading activity this week. I had to calculate all of the PL by hand, so feel free to double check it.

Thanks
Very nicely done! Two requests of you:

First, could you open a new thread for your method and post it here? Many of us would like to learn and follow.

Secondly, see if you can remember to post screenshots of your trades!
  • #363
  • Jul 25, 2009 11:20am Jul 25, 2009 11:20am
Quoting Dreamliner
Very nicely done! Two requests of you:

First, could you open a new thread for your method and post it here? Many of us would like to learn and follow.

Secondly, see if you can remember to post screenshots of your trades!
First of all: we seem to be using almost the exact same trading strategy. We use different pairs and maybe slightly different entries and exists, but for the most part we're doing the exact same thing. Does this require a seperate thread?

Secondly: I'll do my best on the screenshots, but I usually trade while at work so that makes it difficult!

Thanks,
Andrew
  • #364
  • Jul 25, 2009 12:11pm Jul 25, 2009 12:11pm
Quoting girdle66
First of all: we seem to be using almost the exact same trading strategy. We use different pairs and maybe slightly different entries and exists, but for the most part we're doing the exact same thing. Does this require a seperate thread?

Secondly: I'll do my best on the screenshots, but I usually trade while at work so that makes it difficult!

Thanks,
Andrew
Sorry Andrew, my bad. I confused you with scooby-do who earlier said he would start a new thread with his EMA method. No need to start a new thread. Sorry about that.
  • #365
  • Jul 25, 2009 3:25pm Jul 25, 2009 3:25pm
Quoting girdle66
Sorry, I said I'd post charts this week and I didn't. Attached is a spreadsheet with all my trading activity this week. I had to calculate all of the PL by hand, so feel free to double check it.

Thanks
By the way, are you using Daily FX Charts, and if so, what timeframe are you using?
  • #366
  • Jul 25, 2009 5:00pm Jul 25, 2009 5:00pm
Quoting Dreamliner
This week I have traded these four, all successfully, increased live account by 34%:
...
That's tremendous! Good job. Just for fun I went back and re-read some of this thread from a month or 2 ago. What a hoot!

I have no doubt this method can be very profitable. I just need to work on my implementation. Better entry and exits. Maybe find someone who wants to program a better indicator. Some kind of tool to show the difference in both pips and % would be helpful. Over user-defined TP and starting time, etc. Anyone?

Happy trading to all and let's keep "thinking outside the box".
  • #367
  • Jul 25, 2009 5:05pm Jul 25, 2009 5:05pm
Yes, we've definitely evolved haven't we?

I keep thinking Swingman is going to swing by here one of these days and post one of his fancy indicators, but so far no luck .

Right now I'm just visually trading. If the monster's mouth is wide open it means he's about to gobble down some pips so I enter. Then I exit when his mouth is closed.

I'm sure there is some kind of an indicator that would be helpful though.

Quoting markfx
That's tremendous! Good job. Just for fun I went back and re-read some of this thread from a month or 2 ago. What a hoot!

I have no doubt this method can be very profitable. I just need to work on my implementation. Better entry and exits. Maybe find someone who wants to program a better indicator. Some kind of tool to show the difference in both pips and % would be helpful. Over user-defined TP and starting time, etc. Anyone?

Happy trading to all and let's keep "thinking outside the box".
  • #368
  • Jul 26, 2009 12:19pm Jul 26, 2009 12:19pm
I'm making progress, but not as fast as I'd like.
Attached Image (click to enlarge)
Click to Enlarge Name: jmcccp1-002.gif Size: 45 KB
  • #369
  • Jul 26, 2009 1:29pm Jul 26, 2009 1:29pm
Quoting Jm1941
I'm making progress, but not as fast as I'd like.
Well get busy, what do you think we're paying you for? (Oh wait...)

Seriously, that is a great looking chart and indicator.
  • #370
  • Jul 26, 2009 2:53pm Jul 26, 2009 2:53pm
Quoting Dreamliner
By the way, are you using Daily FX Charts, and if so, what timeframe are you using?
Yes, I'm using the Daily FX charts. I use the 30M timeframe with Euro and Cable only. I know this system can work with other pairs too, I just don't have the time to watch any more. Also, these pairs are considerably less jumpy than others, and that preferable to me.
  • #371
  • Jul 26, 2009 3:33pm Jul 26, 2009 3:33pm
Thanks girdle66 for that excel file with the entries and exits and with the time.
Easier to go back and see what you were seeing at that time...

Forgot to mention... great total for the week for just two pairs!

Thanks.

Bruce


Quoting girdle66
Yes, I'm using the Daily FX charts. I use the 30M timeframe with Euro and Cable only. I know this system can work with other pairs too, I just don't have the time to watch any more. Also, these pairs are considerably less jumpy than others, and that preferable to me.
  • #372
  • Jul 26, 2009 3:59pm Jul 26, 2009 3:59pm
Quoting girdle66
Yes, I'm using the Daily FX charts. I use the 30M timeframe with Euro and Cable only. I know this system can work with other pairs too, I just don't have the time to watch any more. Also, these pairs are considerably less jumpy than others, and that preferable to me.
Thanks much, keep going!
  • #373
  • Jul 26, 2009 6:28pm Jul 26, 2009 6:28pm
Jm1941,

Looks like you really are making progress. This is very interesting.

Bruce

Quoting Jm1941
I'm making progress, but not as fast as I'd like.
  • #374
  • Jul 27, 2009 12:54am Jul 27, 2009 12:54am
Quoting Dreamliner
This is not a market neutral trading method. So if both go up or both go down, even though they cross, you can be down pips.

This is one of the reasons why I prefer negatively correlated pairs.
Do the same rules apply to negatively correlated pair as to positively ones?
Sell upper and buy lower?
  • #375
  • Jul 27, 2009 6:20am Jul 27, 2009 6:20am
Quoting T.E.Lawrence
Do the same rules apply to negatively correlated pair as to positively ones?
Sell upper and buy lower?
yes
  • #376
  • Jul 27, 2009 9:03am Jul 27, 2009 9:03am
I have been following this for some time now and started earning great pips in FXCM demo. I just ran all the Mataf daily correlations and sought out the highest ( > -70%) correlations and matched them up with what FXCM offers as far as pairs go. These setups should help you out.

Click on the images to enlarge

Attached Image (click to enlarge)
Click to Enlarge Name: DailyFX Screen Layout.jpg Size: 423 KB

DailyFX Screen Layout


Attached Image

FXCM Setup

Attached Image (click to enlarge)
Click to Enlarge Name: 7-27-09a chart.jpg Size: 178 KB

Recent entry
  • #377
  • Jul 27, 2009 9:27am Jul 27, 2009 9:27am
Dreamliner - Can you explain how adopt the strategy for Negative pairs as for positive?

As my thinking negative ones move apart and so should keep going that way - so if you sell top and buy bottom you are at risk the pairs should keep going against you? whereas its the positive one's once apart that should converge once apart?


Quote:
Originally Posted by T.E.Lawrence
Do the same rules apply to negatively correlated pair as to positively ones?
Sell upper and buy lower?

yes
  • #378
  • Jul 27, 2009 9:29am Jul 27, 2009 9:29am
Quoting Dreamliner
yes
Nice! Today I've made my 1st trade with negatively correlated pair (euro - swissy) and this pair is real beauty. It moves pretty often sideways and currencies are mirroring themselves. +75 pips.

P.S.

Often I close my position when I see -20 pips loss and then enter in better place. I try to employ some money management rules. Also when I finished trading on 15 min tf, I go to 30 min and if there the gap is still opened I enter the trade once again.

But what you do when there are conflicting gaps on different time frames? I.E. on 5 min euro on top and cable at the bottom, on 15 min no gap, and on 30 min cable on top and euro at the bottom?
  • #379
  • Jul 27, 2009 9:31am Jul 27, 2009 9:31am
That is correct; however, I look at the past and see statistical probability and place orders based on that.

Even trading correlated pairs you are still at risk. If both markets trend largely you could be down pips and not sure when it will come back.

There is risk in trading both correlated and non-correlated.

Quoting redart007
Dreamliner - Can you explain how adopt the strategy for Negative pairs as for positive?

As my thinking negative ones move apart and so should keep going that way - so if you sell top and buy bottom you are at risk the pairs should keep going against you? whereas its the positive one's once apart that should converge once apart?


Quote:
Originally Posted by T.E.Lawrence
Do the same rules apply to negatively correlated pair as to positively ones?
Sell upper and buy lower?

yes
  • #380
  • Jul 27, 2009 9:32am Jul 27, 2009 9:32am
Quoting redart007
Dreamliner - Can you explain how adopt the strategy for Negative pairs as for positive?

As my thinking negative ones move apart and so should keep going that way - so if you sell top and buy bottom you are at risk the pairs should keep going against you? whereas its the positive one's once apart that should converge once apart?


Quote:
Originally Posted by T.E.Lawrence
Do the same rules apply to negatively correlated pair as to positively ones?
Sell upper and buy lower?

yes
Well there is always possibility of pairs going against you, when trading every combination.
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