Hedge and Correlation Strategy | Page 48 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Correlation + Momentum Strategy? 6 replies

MT4 MTF Correlation table and Correlation oscillator indicators 155 replies

InsomiaFX Correlation Double Hedge EA 66 replies

Looking for EA for Correlation Strategy 6 replies

Hedge strategy (not a hedge fund) 13 replies

Attachments: Hedge and Correlation Strategy
Exit Attachments

Hedge and Correlation Strategy

  • #941
  • Sep 4, 2009 11:33pm Sep 4, 2009 11:33pm
Quoting Dreamliner
Maybe somebody might have a chance to run over to Mataf and list all the pairs that are negatively correlated at 75% or greater?

Refer to this post:
http://www.forexfactory.com/showthre...05#post2906005
  • #942
  • Sep 5, 2009 12:14am Sep 5, 2009 12:14am
Here is a chart of pairs which are available at FXCM (charting package we use) and Positive correlation on the 1hr and daily are > 75%:

Attached Image (click to enlarge)
Click to Enlarge Name: pos cor more than 75 on 1hr & daily.jpg Size: 308 KB


22 Unique sets with pos correlation > 75% on 1 hr and daily as of 9/4/09:
AUDCHF/AUDGBP
AUDCHF/AUDJPY
AUDCHF/AUDUSD
AUDGBP/AUDUSD
AUDJPY/AUDUSD
AUDJPY/CADJPY
AUDJPY/CHFJPY
AUDJPY/EURJPY
AUDUSD/CADJPY
CADJPY/CHFJPY
CHFJPY/EURJPY
CHFJPY/GBPJPY
CHFJPY/GBPUSD
EURAUD/USDCAD
EURCAD/EURUSD
EURCAD/GBPCAD
EURCAD/USDCAD
EURJPY/GBPJPY
EURJPY/GBPUSD
GBPCAD/USDCAD
GBPJPY/GBPUSD
GBPJPY/USDJPY
  • #943
  • Sep 5, 2009 12:29am Sep 5, 2009 12:29am
Thanks for posting

I just found this thread. I wanna read it all but there are 63 pages and it seems too long. Does this system work?

Seems like buying EUR/USD and GBP/USD is simply buying EUR/GBP.
When I buy it, it moves down. When I sell it, it moves up.
  • #944
  • Sep 5, 2009 12:42am Sep 5, 2009 12:42am
Quoting pujolshomerun
Thanks for posting

I just found this thread. I wanna read it all but there are 63 pages and it seems too long. Does this system work?

Seems like buying EUR/USD and GBP/USD is simply buying EUR/GBP.
yes it does work, after practice.


2) seems like it, but not so.
  • #945
  • Sep 5, 2009 12:54am Sep 5, 2009 12:54am
Quoting jeffreytp
yes it does work, after practice.


2) seems like it, but not so.

How much amount should you buy/sell?

For example, if you are Selling EUR/USD and buying GBP/USD, the size of EUR/USD is 1000 units,


should you buy 1000 GBP/USD too or buy only the same value (872 units as of now) of GBP/USD?
When I buy it, it moves down. When I sell it, it moves up.
  • #946
  • Sep 5, 2009 1:49am Sep 5, 2009 1:49am
Quoting pujolshomerun
How much amount should you buy/sell?

For example, if you are Selling EUR/USD and buying GBP/USD, the size of EUR/USD is 1000 units,


should you buy 1000 GBP/USD too or buy only the same value (872 units as of now) of GBP/USD?

1/1
refer to post # 1
  • #947
  • Sep 6, 2009 1:04pm Sep 6, 2009 1:04pm
Dear all,

I have been reading a for a month now the thread and I would like to ask you if anyone of you is :

a) Trading the EUR/USD Vs USD/DKK (those two pairs are negatively correlated as DKK is pegged to the Euro).

b) Trading based on 1 minute charts.

By the way for those who may wonder what voukefalas means, I must inform you that it was the horse of Alexander the Great.

Thank you in advance.
  • #948
  • Sep 6, 2009 4:49pm Sep 6, 2009 4:49pm
it gave GU buy / EU sell signal then pairs crosses again and gave 30pips.

http://img32.imageshack.us/img32/3356/indicatorler.png
  • #949
  • Sep 6, 2009 6:22pm Sep 6, 2009 6:22pm
I dont' trade DKK or 1 minute charts.
  • #950
  • Sep 6, 2009 6:28pm Sep 6, 2009 6:28pm
Quoting tasciy
it gave GU buy / EU sell signal then pairs crosses again and gave 30pips.
Hi Tasciy,
Can you post your indicator here for us check out as well.

Thanks
  • #951
  • Sep 6, 2009 6:44pm Sep 6, 2009 6:44pm
Hi Dreamliner,
Thanks a bunch for sharing this strategy/system with the folks here. I have a couple questions for you:

1) What is the max open drawdown in pips have you had with a position pair(approx will do) ? Also how long in time have you had to hold a losing position until it came back to the green (again approx is good enough). Trying to see if we can come up with some kind of SL/TP with good R:R as this system seems to have a high winning ratio.

2) Do these opportunities occur just after news announcements mostly? For ex: did the NFP last friday give you a bunch of opportunities?

3) I have read the whole thread and as far as i can tell you haven't had a losing trade with this system yet? Am i right?

Thanks
  • #952
  • Sep 6, 2009 6:49pm Sep 6, 2009 6:49pm
Hello Bravester:

1) I'm sorry but I have not kept track of drawdown in pips, only in money, which I've mentioned before was about 10%. That was very high, normally it is much lower.

2) The opportunities occur nearly every day, on the pairs we trade. Certainly the news last Friday was wonderful to us, gave us a bunch of trades and I took as many as I could and profited on every single one.

3) I have not had a losing trade with this system since beginning it, last March. However, that is not to say that this system will not lose, just that I haven't had a losing trade. Caution is needed with this, if pairs trend strongly I may have to take losses.

Hope this helps.

Quoting bravester
Hi Dreamliner,
Thanks a bunch for sharing this strategy/system with the folks here. I have a couple questions for you:

1) What is the max open drawdown in pips have you had with a position pair(approx will do) ? Also how long in time have you had to hold a losing position until it came back to the green (again approx is good enough). Trying to see if we can come up with some kind of SL/TP with good R:R as this system seems to have a high winning ratio.

2) Do these opportunities occur just after news announcements mostly? For ex: did the NFP...
  • #953
  • Sep 6, 2009 10:35pm Sep 6, 2009 10:35pm
Quoting jtmoore007
lets see if this worked public skype chat. let me know if you join on here so i can see if you are on skype or i need to retry.

http://www.skype.com/go/joinpublicch...-i8za0TJD5zYqg

will you all be there on skype tonight ? I am on and i see a few folks out there but the room seems very silent.
  • #954
  • Sep 6, 2009 11:02pm Sep 6, 2009 11:02pm
Quoting Dreamliner
Hello Bravester:

1) I'm sorry but I have not kept track of drawdown in pips, only in money, which I've mentioned before was about 10%. That was very high, normally it is much lower.

2) The opportunities occur nearly every day, on the pairs we trade. Certainly the news last Friday was wonderful to us, gave us a bunch of trades and I took as many as I could and profited on every single one.

3) I have not had a losing trade with this system since beginning it, last March. However, that is not to say that this system will not lose, just that...
Thanks for your answers Dreamliner !!!

I am just now starting out on this method, i have read the whole thread and also have the marketscope setup completed. Can you please tell me your best 4 pair of pairs (in order of preference if possible) in your experience ? I want to set these 4 on my marketscope to start off for now. Thanks.
  • #955
  • Sep 7, 2009 1:12am Sep 7, 2009 1:12am
New trade:

Attached Image (click to enlarge)
Click to Enlarge Name: chart.jpg Size: 133 KB


Current open positions:

GBP/USD short x1
GBP/CHF long x1
  • #956
  • Sep 7, 2009 1:19am Sep 7, 2009 1:19am
Hey Dreamliner,

don't you think gbp/usd & gbp/chf are not much correlated? daily correlation of 63.7 could be dangerous: with that small correlation one pair can stay at the same level and other pair can go up or down hundreds pips. With high correlated pairs usually both pairs are going same ways with short times of de-correlation (gaps) and of course there's hedging. With lower correlation, hedging could be less efficient.

I don't know - it's first time I trade with those pairs, we'll see.
  • #957
  • Sep 7, 2009 1:23am Sep 7, 2009 1:23am
BTW,

shouldn't we take into account the pip cost? I.E., in my broker, gbp/usd's pip cost is 1, and gbp/chf's pip cost is 0.95.
  • #958
  • Sep 7, 2009 2:45am Sep 7, 2009 2:45am
If the pairs were negatively correlated such as the AUD/USD & EUR/AUD, then how would one implement this trade properly?
Probability Professor
  • #959
  • Sep 7, 2009 2:56am Sep 7, 2009 2:56am
Quoting Galation
If the pairs were negatively correlated such as the AUD/USD & EUR/AUD, then how would one implement this trade properly?
Sell a top pair, buy a bottom pair. But keep in mind that trading negatively correlated pairs is very dangerous - that's why we mainly trade positively correlated ones.
  • #960
  • Sep 7, 2009 2:59am Sep 7, 2009 2:59am
Quoting T.E.Lawrence
Sell a top pair, buy a bottom pair. But keep in mind that trading negatively correlated pairs is very dangerous - that's why we mainly trade positively correlated ones.
Why is it dangerous?
Probability Professor
0 traders viewing now