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Hedge and Correlation Strategy

  • #1,501
  • Jan 25, 2011 9:46am Jan 25, 2011 9:46am
This is my last trade:

Entry: 15h17, Sell GBP/JPY: 130.283 (3 lots), Buy GBP/USD: 1.5774 (4 lots)

Exit: 15h21, GBP/JPY: 130.344 (-221.68.-$), GBP/USD: 1.57899 (+636.00.-$)

Total gain: 414.32.-$ (yes, demo account).
Attached Image (click to enlarge)
Click to Enlarge Name: Trade.jpg Size: 72 KB
  • #1,502
  • Jan 25, 2011 10:06am Jan 25, 2011 10:06am
The new stoc indicator is helpful, Easily one can make out when the stoc difference percentage starts reducing. Thanks.
Intraday only.
  • #1,503
  • Jan 25, 2011 10:12am Jan 25, 2011 10:12am
Quoting Caillou
This is my last trade:

Entry: 15h17, Sell GBP/JPY: 130.283 (3 lots), Buy GBP/USD: 1.5774 (4 lots)

Exit: 15h21, GBP/JPY: 130.344 (-221.68.-$), GBP/USD: 1.57899 (+636.00.-$)

Total gain: 414.32.-$ (yes, demo account).
I made 790 $ on a 5000 $ a/c today using euro/usd and usd/chf pairs. Of cource demo a/c.
Intraday only.
  • #1,504
  • Jan 25, 2011 10:14am Jan 25, 2011 10:14am
Quoting navk
I made 790 $ on a 5000 $ a/c today using euro/usd and usd/chf pairs. Of cource demo a/c.
  • #1,505
  • Jan 25, 2011 10:37am Jan 25, 2011 10:37am
Quoting Caillou
Hi Navk,

Happy to see you again.

Today I was a bit busy so I could only take 3 trades M1 on GBP/USD-GBP/CHF (2) and GBP/USD-GBP/JPY (1). 3 wins,...
My observation :

Enter when stoc difference is max and starts reducing. The stoc diff. can not go beyond 100 % technically.
Intraday only.
  • #1,506
  • Jan 25, 2011 10:45am Jan 25, 2011 10:45am
Quoting navk
My observation :

Enter when stoc difference is max and starts reducing. The stoc diff. can not go beyond 100 % technically.
Yes, the problem is where we can set the max level: 100% (never), 90 % (rarely), 80%....... ???
  • #1,507
  • Jan 25, 2011 10:49am Jan 25, 2011 10:49am
Quoting Caillou
Yes, the problem is where we can set the max level: 100% (never), 90 % (rarely), 80%....... ???
The safer entry is when the stoc difference is max. If you enter 80 % or less the risk is limited to 20 to 30 %. On top of it, one can be sure that at some point of time the stoc diff. will come down below 70 to 80 %. If you enter when the diff is 40 % the risk is 60 %.

Also it is worth to open stoc for different pair combinations and enter whichver is safer.
Intraday only.
  • #1,508
  • Jan 25, 2011 10:56am Jan 25, 2011 10:56am
I attach a stoc for euro/usd and usd/chf pair where you can see when the diff was around 70 %, it always reduced.
Attached Image (click to enlarge)
Click to Enlarge Name: euro stochastic.gif Size: 22 KB
Intraday only.
  • #1,509
  • Jan 25, 2011 11:02am Jan 25, 2011 11:02am
Quoting navk
I attach a stoc for euro/usd and usd/chf pair where you can see when the diff was around 70 %, it always reduced.

Totally agree with you. I´m waiting for a bad trade: for example if you enter at 40%, then the gap goes up 80% and exit when they cross. I want to see how much could be the loss......
  • #1,510
  • Jan 25, 2011 11:09am Jan 25, 2011 11:09am
I sent a message to roundrock if it is possible to create an EA. Let us see.
Intraday only.
  • #1,511
  • Jan 25, 2011 11:38am Jan 25, 2011 11:38am
WHen you enter let us say the diff is 50 %, we can go on add volumes at every 10 % increase in diff. Keep the risk to minimum when you first enter so that you can go on add when the diff increases. This also will work i guess. But we have to try it out.
Intraday only.
  • #1,512
  • Jan 25, 2011 12:19pm Jan 25, 2011 12:19pm
I have certain doubts about usage of stochastic as proper indicator for entry/exit of this strategy.
Right now (aprox 1:00PM ) the indicator covered a quick way between 30-80 and in reality it is just few pips what can be tens of pips or more next time.
There is really needed a fixed price overlaying chart what is not easy as I understood.
Attached Image (click to enlarge)
Click to Enlarge Name: Obrázek1.jpg Size: 94 KB
  • #1,513
  • Jan 25, 2011 1:31pm Jan 25, 2011 1:31pm
I have just closed a new trade: it started at 50%, goes up till 96% and goes down till crossing when I exit. At the crossing the result was breakeven.

I´m going to test more these bad trades, more important for me than good trades in order to see the final result......
  • #1,514
  • Jan 25, 2011 1:38pm Jan 25, 2011 1:38pm
Another one enter at 50%, exit at crossing: + 10 pips....
  • #1,515
  • Jan 25, 2011 1:50pm Jan 25, 2011 1:50pm
I have seen a corelation chart here.

http://www.mataf.net/en/tools/01-01-correlation
Intraday only.
  • #1,516
  • Jan 25, 2011 1:52pm Jan 25, 2011 1:52pm
It looks euro/usd and usd/jpy too will work better.
Intraday only.
  • #1,517
  • Jan 25, 2011 1:57pm Jan 25, 2011 1:57pm
EUR/USD-GBP/USD, enter at 50%, exit at cross: +11 pips.....

Waiting for a bad trade....
  • #1,518
  • Jan 25, 2011 3:10pm Jan 25, 2011 3:10pm
If this helps in back testing, I put a third line on the indicator (Yellow dotted line) that shows the difference between the two pairs and any point in time.

If you do not want to use it, just turn the color to NONE

I am finding it useful as a fast graphical representation.
Attached File(s)
File Type: mq4 Stochastic different pairs 1.2.mq4   3 KB | 1,573 downloads
  • #1,519
  • Jan 25, 2011 3:55pm Jan 25, 2011 3:55pm
Quoting peje
I have certain doubts about usage of stochastic as proper indicator for entry/exit of this strategy.
Right now (aprox 1:00PM ) the indicator covered a quick way between 30-80 and in reality it is just few pips what can be tens of pips or more next time.
There is really needed a fixed price overlaying chart what is not easy as I understood.
Peje,

agree without restrictions. Using stoch only is inadequate imo. Closing running trades at high/low levels of stochs, as someone mentioned, is contradicting the efforts to get the largest range between the 2 charts.

josch
trading is war - life is simple
  • #1,520
  • Jan 25, 2011 3:57pm Jan 25, 2011 3:57pm
Quoting josch
Peje,

agree without restrictions. Using stoch only is inadequate imo. Closing running trades at high/low levels of stochs, as someone mentioned, is contradicting the efforts to get the largest range between the 2 charts.

josch
Please describe exactly what you mean by the largest range. Do you mean in number of pips between the two pairs? If you can describe it clearly I can probably program it.
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