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Hedge and Correlation Strategy

  • #541
  • Aug 21, 2009 9:07am Aug 21, 2009 9:07am
Quoting Dreamliner
I'm still trading this too, exactly as posted in post number 1. I made 38% on my account last week, and so far this week 20%.
Me too, but I trade 1 lot AUDUSD vs. 0.5 lot GBPJPY, sometimes 1 lot AUDUSD vs. 1 lot CHFJPY.

I started $10K demo on August 5, today it is $16,197. It's a bit risky trading full standard lot, but it's a demo, I just want to see the limits.

It's only two weeks. I wonder how long this will work
Attached Image (click to enlarge)
Click to Enlarge Name: audusd_gbpjpy_hedge.jpg Size: 101 KB
  • #542
  • Aug 24, 2009 1:35am Aug 24, 2009 1:35am
Quoting girdle66
Me too, same as day 1. I've had a trade or two over the past 3 months that I've had to exit with a loss, but that was when I was intentionally being too aggressive with the system. Since then I've tamed down a bit, and not gone in with too much too soon, typically making %1-%7 of my account value per trade on 2 or 3 trades per week (only using Eur/Gbp).
Do you have some specified 'rules of engagement'? Or do you just base your trading decisions on experience and 'feel'?
  • #543
  • Aug 24, 2009 5:33am Aug 24, 2009 5:33am
Quoting T.E.Lawrence
Do you have some specified 'rules of engagement'? Or do you just base your trading decisions on experience and 'feel'?
Totally "experience and feel". If the monster opens his mouth he will eat pips. He may open his mouth further, after I get in, but eventually it will close. Not saying it has to, it may someday turn on me, but as of right now I can "see and feel" when it will be a profitable trade, and have not lost on one yet.
  • #544
  • Aug 25, 2009 10:20am Aug 25, 2009 10:20am
been waiting for a few days now

Attached Image (click to enlarge)
Click to Enlarge Name: aa.jpg Size: 117 KB


It actually gets worse. I am still in a trade Buy GC Sell EG 8/10/09 18:36. Building negative numbers.
  • #545
  • Aug 25, 2009 10:29am Aug 25, 2009 10:29am
Quoting jeffreytp
been waiting for a few days now

Attachment

It actually gets worse. I am still in a trade Buy GC Sell EG 8/10/09 18:36. Building negative numbers.
Feel free to get out if you need to, or continue if you want. Your trade, your call.

By the way, this is the very reason I placed the disclaimer on page 1 not to trade this system live.
  • #546
  • Aug 26, 2009 12:26am Aug 26, 2009 12:26am
Quoting jeffreytp
been waiting for a few days now

Attachment

It actually gets worse. I am still in a trade Buy GC Sell EG 8/10/09 18:36. Building negative numbers.
I've notice that if the trade goes for more than one day, the trade is lost. I don't know why, but in longer term pairs are 'drifting', which results in loss, even when they corss each other at the end. Every trade I had, which took more than one day, was a losing trade. That's why I try to trade on smaller time frames like 5 min. Also when I'm trading on 30min I usually exit a trade after 20-30 pips profit. I had some killer trades with >100 pips profit, but also had losing trades with 160 pips loss.

P.S.
This is important:

This system works well when pairs are ranging. When they are trending, this strategy is a losing one. This is based on my observations.
  • #547
  • Aug 26, 2009 4:37am Aug 26, 2009 4:37am
I just closed my trade in GBP/USD GBP/CHF after 5 days being open, closed at a large profit.

I have never lost a trade that went more than a day; indeed, have never lost a trade yet. Not to say that won't happen in the future, but I just let the trade run and close in a profit.

Some say this is dangerous, that's why I suggest to anyone not to trade this way. But for me, I'm making large sums of money .

Quoting T.E.Lawrence
I've notice that if the trade goes for more than one day, the trade is lost. I don't know why, but in longer term pairs are 'drifting', which results in loss, even when they corss each other at the end. Every trade I had, which took more than one day, was a losing trade. That's why I try to trade on smaller time frames like 5 min. Also when I'm trading on 30min I usually exit a trade after 20-30 pips profit. I had some killer trades with >100 pips profit, but also had losing trades with 160 pips loss.

P.S.
This is important:

This system works...
  • #548
  • Aug 26, 2009 5:20am Aug 26, 2009 5:20am
Quoting Dreamliner
I just closed my trade in GBP/USD GBP/CHF after 5 days being open, closed at a large profit.

I have never lost a trade that went more than a day; indeed, have never lost a trade yet. Not to say that won't happen in the future, but I just let the trade run and close in a profit.

Some say this is dangerous, that's why I suggest to anyone not to trade this way. But for me, I'm making large sums of money .
What pairs have you found most profitable? Still trading eurusd / gbpusd ?
  • #549
  • Aug 26, 2009 5:41am Aug 26, 2009 5:41am
Quoting T.E.Lawrence
What pairs have you found most profitable? Still trading eurusd / gbpusd ?
I trade any and all pairs that open their mouths, still trading EUR/USD GBP/USD yes. I'm in that trade right now.
  • #550
  • Aug 26, 2009 8:43am Aug 26, 2009 8:43am
Quoting Dreamliner
I trade any and all pairs that open their mouths, still trading EUR/USD GBP/USD yes. I'm in that trade right now.
Great! I'm trying using your strategy with 1m scalping - I'll post my results.
I still don't know why I have some losing trades, especially with longer term trades (30mins). But, do you wait for pairs to cross each other so they change their positions - bottom pair is on top and top pair is below, or you exit a trade when they touch each other?
  • #551
  • Aug 26, 2009 8:58am Aug 26, 2009 8:58am
Quoting T.E.Lawrence
Great! I'm trying using your strategy with 1m scalping - I'll post my results.
I still don't know why I have some losing trades, especially with longer term trades (30mins). But, do you wait for pairs to cross each other so they change their positions - bottom pair is on top and top pair is below, or you exit a trade when they touch each other?
Great, let us know how the 1 minute scalping goes, that may be a viable alternative, who knows? I guess my only concern about the 1 minute is what if the 30 minute or 1 hour or daily is gapped open in the reverse way? So if EUR/USD is on top of GBP/USD on the one minute, what if those are reversed on the 1 hour?

I close when in profit. Because I am in the air most days with my job I just check when I land and if it is in profit, and if the gap has closed some, I will close.
  • #552
  • Aug 26, 2009 2:04pm Aug 26, 2009 2:04pm
How's the 1-minute scalping going T.E. Lawrence?
  • #553
  • Aug 26, 2009 2:32pm Aug 26, 2009 2:32pm
Quoting T.E.Lawrence
Great! I'm trying using your strategy with 1m scalping - I'll post my results.
I still don't know why I have some losing trades, especially with longer term trades (30mins). But, do you wait for pairs to cross each other so they change their positions - bottom pair is on top and top pair is below, or you exit a trade when they touch each other?
You are losing because you are closing the trade. Leave the trade open until you see a net profit between the two pairs. The startegy is to not close until you see profit.

The trade I referenced above is losing right now due to continued trend, BUT when the trend reverses (which it will), I'll be up nice sums of money.
  • #554
  • Aug 26, 2009 3:01pm Aug 26, 2009 3:01pm
Trade this strategy live with 0 risk:

IBFX.com
$50 Incentive Offer Terms & Conditions:

1. To qualify, customers must have their Interbank FX live account created and approved between Saturday, August 1, 2009 and Monday, August 31, 2009 at 5pm EDT (21:00 GMT)
2. Opening an account with this promotion indicates that the customer has read and accepts the terms and conditions of the $50.00 Incentive Offer.
3. $50.00 Incentive Offer is available to new Interbank FX customers only. $50.00 will be deposited into a new account with Interbank FX within 3 business days of an approved application. Limit one per customer.
4. The $50.00 incentive is for initial trading activity only. If the account does not have trading activity during the first 90 days, the incentive is forfeit and will be returned to Interbank FX.
5. The incentive will be available for withdrawal or transfer to another account after the customer has executed 5 round-turn standard lot trades in that account. For mini accounts to qualify they must trade the equivalent number of standard round-turn lots. (1 mini lot = 0.1 standard lots)
6. Deposits to the trading account adhere to existing rules and guidelines for deposits.
7. Interbank FX reserves the right to modify, amend or discontinue this program at any time.

NO DEPOSIT OF YOUR OWN MONEY RERQUIRED
  • #555
  • Aug 27, 2009 1:18am Aug 27, 2009 1:18am
Quoting jeffreytp
You are losing because you are closing the trade. Leave the trade open until you see a net profit between the two pairs. The startegy is to not close until you see profit.

The trade I referenced above is losing right now due to continued trend, BUT when the trend reverses (which it will), I'll be up nice sums of money.
So you wait for a profit and don't close a trade, even when pairs crossed each other?

Maybe jeffreytp is right. Or:

mabye I have losses because euro and cable spreads are different? Shouldn't I take this into account? When I'm entering a trade, I place same orders for euro and cable, i.e. short 10K of euro & long 10K of cable. Maybe I should buy/sell more of euro, because cable's spread is bigger?
  • #556
  • Aug 27, 2009 4:37am Aug 27, 2009 4:37am
Dear Dreamliner and Thread,

I use eSignal and am able to overlay one price series over another without issue. My question is, do I need
to worry about a chart/scaling issue that has been mentioned previously in the thread, i.e. can I trust the pricing that I see or not? And if I need to adjust that pricing, how do I do that on eSignal? Sorry for any bother and most appreciative of any help.

My best,

Lenoxer
  • #557
  • Aug 27, 2009 5:54am Aug 27, 2009 5:54am
Ok, here's my chart with active trade:

Attached Image (click to enlarge)
Click to Enlarge Name: chart.jpg Size: 132 KB
  • #558
  • Aug 27, 2009 7:12am Aug 27, 2009 7:12am
Quoting T.E.Lawrence
Ok, here's my chart with active trade:

Attachment
I'm in that same trade, have been for a week now. EUR/GBP is finally trending, that's why they've been apart for so long.
  • #559
  • Aug 27, 2009 8:04am Aug 27, 2009 8:04am
Look how different from my above chart the dailyfx's chart is looking:

Attached Image (click to enlarge)
Click to Enlarge Name: chart2.jpg Size: 85 KB


Strange.
  • #560
  • Aug 27, 2009 8:19am Aug 27, 2009 8:19am
Quoting T.E.Lawrence
Look how different from my above chart the dailyfx's chart is looking:

Attachment

Strange.

I covered this many posts back
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