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Hedge and Correlation Strategy

  • #1,941
  • Jan 31, 2011 7:05am Jan 31, 2011 7:05am
Sorry can I have some clarification on some settings, half the recent examples appear to have "stochastic diff pairs 1.6" set to D1 @ 50 periods but using M5 TF, and I think its PipChaser and others have said change the "correlation TimeFrame" setting to 5 for use on M5. He also uses 5000 periods @ M5, just trying to get the right settings confirmed, as far as I can see the overall Tradable Corrlations 1.5 indi should be set to D1 to show the longterm correlations, but the stoch 1.6 placed on individual charts should be set to 5 for M5 TF correlations, is this correct?

Great thread really interesting thanks
  • #1,942
  • Jan 31, 2011 7:11am Jan 31, 2011 7:11am
Quoting smjones
The Calculations must have standard mt4 time frames. It has to do with the correlation algorithm and there is no standard history to correlate to, for currencies in offline mode. sorry
Hi jones,

I downloaded the tradeble corelation indi. It shows corelation and stoc diff. I could see the stoc diff is 5 based on 5 min. The corelation daily or hourly?

Thanks
Intraday only.
  • #1,943
  • Jan 31, 2011 7:15am Jan 31, 2011 7:15am
My first loosing trade this morning around 40 pips. The ea was a bit late triggering the trade but still it would be a loss.
Attached Image (click to enlarge)
Click to Enlarge Name: loosing trade 2.gif Size: 76 KB
  • #1,944
  • Jan 31, 2011 7:16am Jan 31, 2011 7:16am
Quoting E2u
I made 35 scripts for different currency combination today. I put them out here but I'm sure I missed some comb. You can use different lot size on the 2 pairs and you can use magic number.
Thanks for the scripts
Were you also aware of the EA a few pages back that can set the trades for you
  • #1,945
  • Jan 31, 2011 7:17am Jan 31, 2011 7:17am
What other pair is it correlated with? We don't just trade one pair, and we don't trade quads that are under 75%.

Quoting 41413592
today's usdchf corelation is -39%,is it correct to trade this pair?
  • #1,946
  • Jan 31, 2011 7:18am Jan 31, 2011 7:18am
Please ask all questions about MT4 on the MT4 help thread. Let's keep this thread clear of anything except the strategy.

Quoting pipchef
Sorry, I am new to MT4. When I drage the stochastic diff. indicatior in to the window (EUR/USD). It shows "EUR/USD diff 27% concides with XXXXXX, correlation D1 @ 50 Period =-200%."

I have overlaied EUR/USD and USD/CHF chart.
  • #1,947
  • Jan 31, 2011 7:20am Jan 31, 2011 7:20am
Kruspe, you can certainly demo that method and let us know the results, no problem.

Regarding lot size, that is an individual matter, regarding risk tolerance. In Oanda I have it set to automatically trade 5%.

Quoting Kruspe
Hi Dreamliner, congrats to nice pips, I think I understand this strategy, but iīve got a question, why is better to trade (sell EUR/AUD, buy EUR/JPY) instead of (buy AUD/JPY), you can save one spread, am I right ? ...

and what about calculating right lot size when you (sell EUR/AUD, buy EUR/JPY) ?...does it matter that average daily range of this pairs is different ?

Thx, Kruspe
  • #1,948
  • Jan 31, 2011 7:21am Jan 31, 2011 7:21am
Quoting navk
Hi jones,

I downloaded the tradeble corelation indi. It shows corelation and stoc diff. I could see the stoc diff is 5 based on 5 min. The corelation daily or hourly?

Thanks
The correlation is adjustable and the default is 1440 minutes (D1)
  • #1,949
  • Jan 31, 2011 7:23am Jan 31, 2011 7:23am
Nice! That is the same strategy I am using, except if they are not profitable at 50% I wait until 20% to exit. The good news about this is that it is a "system" meaning we have exit criteria even if not profitable.

Quoting occamsrazors
Trades taken late Asian early London session today ...entry on 80% stoch diff, exit on touch of 50% stoch diff. They tend to come in bursts it seems....

1. Long EURAUD short EURJPY 5 pips
2. Short EURCHF Long GBPAUD 24 pips
3. Long GBPAUD short GBPJPY 15 pips
4. Short EURCHF long GBPJPY 3 pips
  • #1,950
  • Jan 31, 2011 7:25am Jan 31, 2011 7:25am
Quoting occamsrazors
Hi ZR

My indi doesn't show the stoch diff (yellow line) getting above 80 for the EURCAD EURJPY (see below). My chart is GMT+2 so I put a red vertical around 10.50 which is 8.50 GMT. Does your chart look like this?
It's a good question becuase when I look back I see the same thing. The possibilities are wither I made a mistake by entering into the wrong pair or the difference line moves?

This my screen shot which is very similar to yours. The previous trade showing is one I entered last night and went to bed. Woke up to 64 pips profit but this is not following the rules so we should ignore it.

I will try to take a snapshot next time I do a trade.

Z
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.JPG Size: 119 KB
  • #1,951
  • Jan 31, 2011 7:27am Jan 31, 2011 7:27am
What was your entry and exit criteria?

Quoting harar
My first loosing trade this morning around 40 pips. The ea was a bit late triggering the trade but still it would be a loss.
  • #1,952
  • Jan 31, 2011 7:33am Jan 31, 2011 7:33am
Quoting peterporter
Thanks for the scripts
Were you also aware of the EA a few pages back that can set the trades for you
Hi Peter

I tried to find the EA but could not. What is it called please?
  • #1,953
  • Jan 31, 2011 7:43am Jan 31, 2011 7:43am
Quoting smjones
The correlation is adjustable and the default is 1440 minutes (D1)
Thanks, one more question. The table shows stoc diff numbers in positive and negative. How do you interpret this ?

For example, for gbpchf and usdchf pair set i am seeing corelation number 89.4 and stoc diff 42. With this info, which pair is at bottom and top of stoc ?

I mean which one to enter long and short ?

Thanks
Intraday only.
  • #1,954
  • Jan 31, 2011 7:45am Jan 31, 2011 7:45am
Quoting peterporter
Thanks for the scripts
Were you also aware of the EA a few pages back that can set the trades for you
If you mean Stock Diff 2 Pair Yes This scripts are when you want to brake the trading rules ;-)
  • #1,955
  • Jan 31, 2011 7:47am Jan 31, 2011 7:47am
Quoting navk
Thanks, one more question. The table shows stoc diff numbers in positive and negative. How do you interpret this ?

For example, for gbpchf and usdchf pair set i am seeing corelation number 89.4 and stoc diff 42. With this info, which pair is at bottom and top of stoc ?

I mean which one to enter long and short ?

Thanks
Some one is not reading my previous posts. Please read the last 10 or 20 posts I made in this thread.

A negative Stoch difference on the Tradable Correlation table means the last currency is on top. a positive Stoch difference means the first currency is on top.
  • #1,956
  • Jan 31, 2011 8:12am Jan 31, 2011 8:12am
Quoting smjones
Some one is not reading my previous posts. Please read the last 10 or 20 posts I made in this thread.

A negative Stoch difference on the Tradable Correlation table means the last currency is on top. a positive Stoch difference means the first currency is on top.
Your post 1814 says that.
Intraday only.
  • #1,957
  • Jan 31, 2011 8:12am Jan 31, 2011 8:12am
Quoting Zr-fx
Hi Peter

I tried to find the EA but could not. What is it called please?

Stock Diff 2 Pair
Attached File(s)
File Type: mq4 Stoch Diff 2 Pair.mq4   7 KB | 852 downloads
  • #1,958
  • Jan 31, 2011 8:21am Jan 31, 2011 8:21am
14H45 (GMT+1), Buy GBP/CAD, Sell EUR/JPY, entry at 76% (canīt wait for 80%), waiting for 50%, 20% and 0% (cross) in order to compare profits......
  • #1,959
  • Jan 31, 2011 8:27am Jan 31, 2011 8:27am
Dear friends,

Please do not use SMJones as an excuse not to do your own reading and searching. He is not our personal "Google" nor should he need to repeat himself over and over. He is a busy man, like all of us, and has donated his time, talents, and abilities to help us. Let's not take advantage of him by asking him things that we could have found had we just read.

I am serious about protecting Scott from further inquiries, for I am certain that if he continues to get bombarded he will have to, of necessity, leave the forum. And we don't want that.

So, because I am interested in protecting his time, if anyone asks him questions that could be discovered by simple reading or searching of the thread I am going to block them from posting on this thread.

I know, big meanie here, but guys I'm serious about wanting to help Scott not get bombarded with questions, the answers to which could be found in other ways.

So, no PM's to SMJones, no asking him questions about indicators, etc. If you really need the answers, and you can't find them by searching, simply take the indicator and post it in the Metatrader forum and ask your question there. I've done that a number of times and I always get the answer there. Got it? Good! I still love ya!

Quoting smjones
Some one is not reading my previous posts. Please read the last 10 or 20 posts I made in this thread.

A negative Stoch difference on the Tradable Correlation table means the last currency is on top. a positive Stoch difference means the first currency is on top.
  • #1,960
  • Jan 31, 2011 8:37am Jan 31, 2011 8:37am
Quoting roundrock
you can use this if you want, i added combined spread. combined spread is sum of both symbol spreads.

Hi All, very interesting thread

Could the Tradeable Correlations be made into ....say a top 20....user could input criteria...like spread and current stoch diff....when the stoch diff hit user input the pair could flash a different color

Just an idea.....monitoring 20 or so on a M5 board....one can accomplish pretty much the same I suppose by just deleting all the pairs in the code but the ones he wants to watch.

cheers
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