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Hedge and Correlation Strategy

  • #1,641
  • Jan 27, 2011 8:23am Jan 27, 2011 8:23am
Good job, nicely done.

By the way, you can adjust the font size in the 1.4b indicator and the yellow difference number will stand out nice and big then. But you have to adjust the font size. I put mine at 17.

Not a big deal, just letting you know...

See the pic.

Quoting Pip Chaser
+12 pips gained. See you'll tonight.
Attached Image (click to enlarge)
Click to Enlarge Name: stoch correlation1.gif Size: 28 KB
  • #1,642
  • Edited 9:30am Jan 27, 2011 9:02am | Edited 9:30am
Quoting Dreamliner
Good job, nicely done.
....
It seems, most traders changed to small timeframe i.e. 1 min. I'd prefer to get more room, more pips (hopefully), knowing it's unavoidable to remain in a trade much longer. I'm in GBPUSD vs USDCHF since yesterday 2:30 p.m., using 30 min. TF.

I think if you're making small # of pips 6-10 for example, you will risk higher business costs over the long run (spread and commissions)?

josch
trading is war - life is simple
  • #1,643
  • Jan 27, 2011 9:03am Jan 27, 2011 9:03am
Roundrock:

Based on this corelation strategy, i set your EA to trigger at 50 and exit at 20 %. I trade 100,000 units and i take positively co related pairs, the important thing the positivly co related pairs shall have corelation 50 to 75 % according to mataf site.

If we choose 80 % and above, then the chance of getting 50 % stoc diff. is negligible.

My a/c is up by 90 $ on a 5000 $ in the last one hour.

Great strtegy BY dreamliner, jones. Good work by roundrock for the EA.

Note : I put the EA on 1 min chart.
Intraday only.
  • #1,644
  • Jan 27, 2011 9:16am Jan 27, 2011 9:16am
My flights are late today due to the snow on the East Coast so I had a chance to modify the first post in this thread. Check it out and let us know what you think/if anything needs to be changed.
  • #1,645
  • Jan 27, 2011 9:22am Jan 27, 2011 9:22am
Josch, yes you are right. Although the compounding you can do with smaller pips, over less time, is amazing. In the end it boils down to the individual trader and what his preferences are.

What timeframe are you trading? And again, I'm sure you are aware of the negative aspects of trading negatively correlated pairs.

Quoting josch
It seems, most traders changed to small timeframe i.e. 1 min. I'd prefer to get more room, more pips (hopefully), knowing it's unavoidable to remain in a trade much longer. I'm in GBPUSD vs USDCHF since yesterday 2:30 p.m.

I think if you're making small # of pips 6-10 for example, you will risk higher business costs over the long run (spread and commissions)?

josch
  • #1,646
  • Jan 27, 2011 9:31am Jan 27, 2011 9:31am
This strategy and EA just printing money. 108 $ up !!
Intraday only.
  • #1,647
  • Jan 27, 2011 9:31am Jan 27, 2011 9:31am
Dreamliner,

yes to neg correlation. My TF is 30 minutes, I added it in the post above (forgot it). But -without any experience- I'll make a try with smaller TF too.

josch
trading is war - life is simple
  • #1,648
  • Jan 27, 2011 9:33am Jan 27, 2011 9:33am
Quoting navk
This strategy and EA just printing money. 108 $ up !!
navk,

how many pairs you are looking at?
I assume you use an ea to cover & TP?

josch
trading is war - life is simple
  • #1,649
  • Jan 27, 2011 9:38am Jan 27, 2011 9:38am
Quoting josch
navk,

how many pairs you are looking at?
I assume you use an ea to cover & TP?

josch
I put it on positively co related pairs. Using seven pair sets. Pair set means eurusd - gbpusd.

For EA just go back few pages, you will see the EA posted by roundrock.
Intraday only.
  • #1,650
  • Jan 27, 2011 9:39am Jan 27, 2011 9:39am
I´m really happy that Stochastic contribution is working.........

I´m testing a small variation which can increase reliability, if it works I will post it.
  • #1,651
  • Jan 27, 2011 9:39am Jan 27, 2011 9:39am
Roundrock : Negatively corelated pairs have a risk of large DD. So i changed pair selection.
Intraday only.
  • #1,652
  • Jan 27, 2011 9:41am Jan 27, 2011 9:41am
You're not kidding!

Quoting navk
Roundrock : Negatively corelated pairs have a risk of large DD. So i changed pair selection.
  • #1,653
  • Jan 27, 2011 9:46am Jan 27, 2011 9:46am
Quoting Dreamliner
You're not kidding!
I think we have to test negatively corelated pairs on a larger time frame, means 30 min or hourly chart. Entry criteria 60 to 80 % exit at 20 %.
Intraday only.
  • #1,654
  • Jan 27, 2011 9:50am Jan 27, 2011 9:50am
Let us know, Caillou!

Quoting Caillou
I´m really happy that Stochastic contribution is working.........

I´m testing a small variation which can increase reliability, if it works I will post it.
  • #1,655
  • Jan 27, 2011 9:52am Jan 27, 2011 9:52am
Quoting Dreamliner
Let us know, Caillou!

Sure.
  • #1,656
  • Jan 27, 2011 9:59am Jan 27, 2011 9:59am
Quoting Dreamliner
My flights are late today due to the snow on the East Coast so I had a chance to modify the first post in this thread. Check it out and let us know what you think/if anything needs to be changed.
Many thanks to all here for such an enjoyable thread, especially to SMJones and Dreamliner, as I've always learned so much from you guys over the past 2+ years. Dreamliner - just wanted to advise the web site on your revised first post should be http://www.mataf.net/en/tools/01-01-correlation and not mataf.com. Thanks again for being so generous - all the best - Steve
  • #1,657
  • Jan 27, 2011 10:12am Jan 27, 2011 10:12am
Quoting Dreamliner
Going Home Trading Method!

You can skip the first 99 pages of this thread, as we have changed over time, refining our entries and exits, and developing a much better method. Start reading on page 100, which is here.

There are 5 Simple Steps to the new “Going Home Trading Method", formerly known as the “Hedging and Correlation” Method. We are still hedging and correlating, just that the new name will help us visualize what we are wanting to accomplish...

DL, the website is www.mataf.net not www.mataf.com
  • #1,658
  • Jan 27, 2011 10:50am Jan 27, 2011 10:50am
This is some very nice information guys, thanks for all the input, I have been reading and watching.

I finally got my setup put together here today, but have not taken any trades so far.

As I understand, the 5m time frame is best, I am watching the EUR/USD and USD/CHF, so far that is the only chart I have set up.

If there are other pairs that seem to be working, can you let me know.

Thanks to Dreamliner, SMJones, Pip Chaser, and many other contributors.

Cheers
  • #1,659
  • Jan 27, 2011 11:16am Jan 27, 2011 11:16am
Quoting monarch
... If there are other pairs that seem to be working, can you let me know. ... Cheers
monarch,

simply have a look at http://www.mataf.net/en/tools/01-01-correlation for correlating pairs. Because correlation isn't living forever, you should check this.

josch
trading is war - life is simple
  • #1,660
  • Jan 27, 2011 11:28am Jan 27, 2011 11:28am
Quoting josch
monarch,

simply have a look at http://www.mataf.net/en/tools/01-01-correlation for correlating pairs. Because correlation isn't living forever, you should check this.

josch
Greeting Josch, I do understand that , it is the reason I am only looking at EURUSD against USDCHF, they are arch rivals. lol

I may only watch this 1 pair, too many pairs could give me a small headache.

Thanks.
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