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Hedge and Correlation Strategy

  • #2,121
  • Feb 2, 2011 6:09pm Feb 2, 2011 6:09pm
Quoting Dreamliner
The question is: do the trips make the trips back home faster than the quads? If we only trade triples (EURUSD/EURJPY) and not the quads (GBPCAD/NZDUSD) have we eliminated risk or increased reward? I think the historical correlation indicator gives us our answer (thanks again SMJones!). Answer: if they are correlated 75% of the time, they are correlated 75% of the time, just like the triples.

Just my thoughts...
I have gone back and forth on this but right now I agree with you. There are a few pairs I am not excited about but if the correlation is strong I am comfortable with it. On the 4 pair quads I have been looking for a higher correlation like 80% or better just to give me a little more peace of mind
Over confidence can be a moral hazard.... not to mention a financial one!
  • #2,122
  • Feb 2, 2011 6:12pm Feb 2, 2011 6:12pm
JCS if you don't mind please discuss this in the other thread, the EA one by Steve, or in the MT4 thread on here. Let's keep this thread about the method itself.

Quoting jcs
Hi Navk

' Old Ticks ' error messages have been a pain in my butt for as long as I have been trading
Previously when I had old tick errors show up in the logs I wouId simply have closed and restarted the platform
As I was only ever doing manual trading this was not much of an issue, just an annoyance

However since I have recently started using ea's this has become an issue, because it was becoming clear the ea's were being affected by these error messages when they are in the logs, and not trading

I contacted one of my brokers about this very...
  • #2,123
  • Feb 2, 2011 6:15pm Feb 2, 2011 6:15pm
I ended up taking about 28 pips on the last 4 pair quad and I still have one 4 pair quad open in about 15-20 pips of DD. 6 quad trades (4 of them the 4 pair variety) since this morning up 117 pips using the 30 minute with an 80 entry and a 50 exit (Although I have closed a couple trades early in +20 pip profit ranges).

Much better than I was getting yesterday on the 5 minute. If this current trade closes out in the same area as the other 5 I would be up around 140 pips since this morning... not a bad days trading.
Over confidence can be a moral hazard.... not to mention a financial one!
  • #2,124
  • Feb 2, 2011 6:19pm Feb 2, 2011 6:19pm
I'm sayin'!

Quoting Mcforex
I ended up taking about 28 pips on the last 4 pair quad and I still have one 4 pair quad open in about 15-20 pips of DD. 6 quad trades (4 of them the 4 pair variety) since this morning up 117 pips using the 30 minute with an 80 entry and a 50 exit (Although I have closed a couple trades early in +20 pip profit ranges).

Much better than I was getting yesterday on the 5 minute. If this current trade closes out in the same area as the other 5 I would be up around 140 pips since this morning... not a bad days trading.
  • #2,125
  • Feb 2, 2011 6:34pm Feb 2, 2011 6:34pm
Quoting Dreamliner
JCS if you don't mind please discuss this in the other thread, the EA one by Steve, or in the MT4 thread on here. Let's keep this thread about the method itself.
Yes, of course, my apologies
I have transferred the post to the Going Home thread
  • #2,126
  • Feb 2, 2011 7:20pm Feb 2, 2011 7:20pm
My final 4 currency quad closed for a small loss of 8 pips at the 50 exit. So I ended up with 109 pips fora 10 hour trading day. The 4 currency quads were 3 out of 4 winners and the 3 currency quads were 2 for 2. Should be fun to keep the testing going on this. For now I will take all quads with the proper correlation.

Cheers everyone!
Over confidence can be a moral hazard.... not to mention a financial one!
  • #2,127
  • Feb 2, 2011 7:28pm Feb 2, 2011 7:28pm
Quoting jcs
Hi Navk

' Old Ticks ' error messages have been a pain in my butt for as long as I have been trading
Previously when I had old tick errors show up in the logs I wouId simply have closed and restarted the platform
As I was only ever doing manual trading this was not much of an issue, just an annoyance

However since I have recently started using ea's this has become an issue, because it was becoming clear the ea's were being affected by these error messages when they are in the logs, and not trading

I contacted one of my brokers about this very...
Thanks a lot.

I did not have an issue in 5 min TF, But had issues at times on 15 min, and regularly on 30 min TF.

I have done all as per procedure explained in dailyfx, and after that in 15 min TF, trades were initiated. Hopefully it continues. 30MIN TF i will have to see tonight how it works.

Thanks.
Intraday only.
  • #2,128
  • Feb 2, 2011 7:29pm Feb 2, 2011 7:29pm
Quoting Mcforex
My final 4 currency quad closed for a small loss of 8 pips at the 50 exit. So I ended up with 109 pips fora 10 hour trading day. The 4 currency quads were 3 out of 4 winners and the 3 currency quads were 2 for 2. Should be fun to keep the testing going on this. For now I will take all quads with the proper correlation.

Cheers everyone!
Just out of curiosity, what were the total pips of the 4 Quads vs the 2 Triples?

cheers
  • #2,129
  • Feb 2, 2011 7:30pm Feb 2, 2011 7:30pm
Quoting Dreamliner
JCS if you don't mind please discuss this in the other thread, the EA one by Steve, or in the MT4 thread on here. Let's keep this thread about the method itself.
Noted.
Intraday only.
  • #2,130
  • Feb 2, 2011 7:52pm Feb 2, 2011 7:52pm
Does anyone have any historical analysis of this method? I think that would be beneficial.
  • #2,131
  • Feb 2, 2011 9:39pm Feb 2, 2011 9:39pm
Quoting Jenkins
Does anyone have any historical analysis of this method? I think that would be beneficial.
Today I tested on 30 min (just visual backtesting) with EURUSD and EURCAD for Jan, 2011. I entered both pair in appropriate direction when Stoch difference was 80, and exited at 20. As I recall, there were 4 trades, with 3 wins. Unfortunately I threw the paper away with the entries/exits ... next time will do in Excel! ;-)

Anyways, one month is hardly any data. I propose that we all chip in to do the analysis (but for a longer time period ... Jan 2010 to present). I will do EURUSD / EURCAD ... anyone up for other correlated pairs? We can post the results here, and once done summarize for all pairs and gather statistics.

Regards,
EZcurrency
  • #2,132
  • Feb 2, 2011 9:55pm Feb 2, 2011 9:55pm
Quoting ezcurrency
Today I tested on 30 min (just visual backtesting) with EURUSD and EURCAD for Jan, 2011....
Thanks. Does anyone know how often the pairings reach the 80 level? Sounds like an Excel project.
  • #2,133
  • Feb 2, 2011 10:36pm Feb 2, 2011 10:36pm
15 min TF : Entry at 80 exit at 20 or when seeing good profit.

Earned 100 pips in a single day.

5 min TF : Entry at 80 exit at 20 or after seeing good profit.

Earned 300 pips in last 60 hrs.

Personally i feel 15 min TF is better as trading costs are less.

Dreamliner and jones : Special thanks to both of you for finding this extremely good strategy. Hats of to both of you. Cheers !
Intraday only.
  • #2,134
  • Feb 2, 2011 10:46pm Feb 2, 2011 10:46pm
Quoting navk
15 min TF : Entry at 80 exit at 20 or when seeing good profit.

Earned 100 pips in a single day.

5 min TF : Entry at 80 exit at 20 or after seeing good profit.

Earned 300 pips in last 60 hrs.

Personally i feel 15 min TF is better as trading costs are less.

Dreamliner and jones : Special thanks to both of you for finding this extremely good strategy. Hats of to both of you. Cheers !
For those who want to know my exit strategy.

5 Min TF : Normally i look for 10 to 16 pips. Or else 20 % exit at small loss, if loss occurs.
15 min : 15 to 20 pips. So far i did not see 20 % !! lol.
Intraday only.
  • #2,135
  • Feb 2, 2011 11:26pm Feb 2, 2011 11:26pm
Hello everyone,
started reading this thred few days back.it's one of the best trading stretagy i ever seen.solute to founder and alll guy who are helping to others.thanks for sharing this.today is my first trade based on this.
Entry set to 70 %
Exit set to 30 %

EURJPY buy - EURNZD sale

5 M

10$ up or 2% of the account - still runing (diff again going up without touching exit point (30%)i hope it will close in some profit).have few question in mind but i'll ask later on.for now good luck to everyone.

  • #2,136
  • Feb 2, 2011 11:33pm Feb 2, 2011 11:33pm
Quoting navk
...
Personally i feel 15 min TF is better as trading costs are less.
What does TF have to do with trading costs? The broker doesn't know what time frame you have on your chart. You lost me.
  • #2,137
  • Feb 2, 2011 11:35pm Feb 2, 2011 11:35pm
Quoting navk
For those who want to know my exit strategy.

5 Min TF : Normally i look for 10 to 16 pips. Or else 20 % exit at small loss, if loss occurs.
15 min : 15 to 20 pips. So far i did not see 20 % !! lol.


Hi navk
is this manual exit or some ea ? if not there should be an ea for both condition whichever come first.trade automaticaly close itself when one of this exit condition comes.

thank you and ragards
  • #2,138
  • Feb 2, 2011 11:54pm Feb 2, 2011 11:54pm
He's talking about the frequency of trades, and hence the spread you pay compared to the lower frequency of trades on the higher time frame.
  • #2,139
  • Feb 2, 2011 11:55pm Feb 2, 2011 11:55pm
Quoting tjfxtrader
What does TF have to do with trading costs? The broker doesn't know what time frame you have on your chart. You lost me.
less number of trades means less cost.
  • #2,140
  • Feb 2, 2011 11:59pm Feb 2, 2011 11:59pm
Hi rockstars,
first of all thank you very much for sharing this idea.want to ask there is two condition in ea (stoch diff 2 pair EAsq )

1. Close Trade if stoch difference is below this number --- 20.0

2. Close Trade if Profit target reached --- 10 $

but only 1st condition is working.want use only 2nd condition.cant wait for 20%.
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