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Hedge and Correlation Strategy

  • #2,301
  • Feb 6, 2011 2:58am Feb 6, 2011 2:58am
Quoting cash4u2
Hi Guys,
I am also a great fan of hedging ;-)

Here I show you how I hedge "circel pairs" = GBPUSD > USDCHF > GBPCHF"
"Circel pairs" means each currency "GBP" "USD" and "CHF" appears twice in these three pairs.
GBPUSD = Buy
USDCHF = Buy
GBPCHF = Sell

or

GBPUSD = Sell
USDCHF = Sell
GBPCHF = Buy

I used no indicator at all, but it took sometimes a while to get in profit.
I used same lotsize on all three pairs and TP of 100$

One might say, hey, why did you not trade just GBPUSD and GBPCHF?
Because, it causes such a...
Hi,

Please could you tell us how you trade these pairs ?
  • #2,302
  • Feb 6, 2011 3:17am Feb 6, 2011 3:17am
Quoting Caillou
Hi,

Please could you tell us how you trade these pairs ?

I used a simple EA, where I only had to enter the three pairs, whether I want to open a sell or buy order for the single pairs, the lotsize and the TP. It did not use any indicator and opened new trades as soon as the previous ones where closed.
But I do not have this EA and do not know its name anymore. But I had it from this forum. I would have preferred to have automatic Lot size (calculated by percentage of free margin) and automatic TP (calculated by percentage of equity).
  • #2,303
  • Feb 6, 2011 4:08am Feb 6, 2011 4:08am
Quoting cash4u2
I used a simple EA, where I only had to enter the three pairs, whether I want to open a sell or buy order for the single pairs, the lotsize and the TP. It did not use any indicator and opened new trades as soon as the previous ones where closed.
But I do not have this EA and do not know its name anymore. But I had it from this forum. I would have preferred to have automatic Lot size (calculated by percentage of free margin) and automatic TP (calculated by percentage of equity).
Ok, so itīs better to forget this 3 "circel pairs" hedged strategy, since we donīt know anything about it.

Thank you anyway.
  • #2,304
  • Feb 6, 2011 4:58am Feb 6, 2011 4:58am
I picked up an idea from sq, to make the trade type depend on the lot size being positive or negative.

The attached offers you complete flexibility over the choice of order type by regarding negative lot sizes as sell trades, positive ones as buys.

Attached File(s)
File Type: mq4 Going Home trade sending script.mq4   5 KB | 623 downloads
  • #2,305
  • Feb 6, 2011 5:31am Feb 6, 2011 5:31am
Is it possible to code the "Stochastic different pairs" indicator for three pairs as well?
  • #2,306
  • Feb 6, 2011 5:32am Feb 6, 2011 5:32am
what about this:

take all stochstic-values of every USD-based Pairs and add them together. take inverse stoch for Pairs like eurUSD, audUSD and so on. then you have an USD-Stochastic-index. do the same with EUR, GBP, JPY .. Pairs.

now do for all currencygroups the diff-calculation and trade the pairs with the the most oversold/overbought value with the highest diff-value.

this are the most probability pairs. what you could also read from this indicator is, if USD, GBP, EUR... Pairs are really in overbought/oversold area.

my 2 cents
  • #2,307
  • Feb 6, 2011 5:38am Feb 6, 2011 5:38am
Quoting cash4u2
Is it possible to code the "Stochastic different pairs" indicator for three pairs as well?
overlay two of the stoch-indi in one subwindow
if currencies are in sync then trade them
  • #2,308
  • Feb 6, 2011 5:50am Feb 6, 2011 5:50am
Quoting Mediator
overlay two of the stoch-indi in one subwindow
if currencies are in sync then trade them
Sorry, but this is not what I meant.
  • #2,309
  • Feb 6, 2011 6:05am Feb 6, 2011 6:05am
Quoting occamsrazors
Here is an example of what I'm talking about. Prior to the Stoch Diff hitting 80%, measuring from the previous stoch diff of 20% (white line), the AUDCHF moved only 4 pips and the USDCHF moved 18 pips for a combined move of 22 pips away from our starting equilibrium of 20% stoch diff. The prices went nowhere after that and the stoch diff drifted back to 50%, resulting in a loss. I think the prior range move of 22 pips is a probably a marginal distance for a trade taking into account spread, but I need to see more on this.

I think what also might...
Hi. Why not wait until the difference is 85% or higher to have a better chance of a win? I have not seen people test this for long enough before trying to change it and add to it.

In the same example you mentioned, the trade you highlight would be a loser but a bit later (approx. 16:30 GMT) the difference goes to about 87% and if you had entered here and exited at 20% it would have a cracking trade!

All I am saying is in my own opinion, I would like to test this strategy as it is for while before I will look at changes, because so far the results have been good.

The only thing I would like is to be able to trigger as the difference is going down. For example the setup is when the difference goes to 87% and the entry is 85% so I am going in the direction of the difference. But for this week I will continue testing the system as is.
  • #2,310
  • Feb 6, 2011 6:09am Feb 6, 2011 6:09am
hey guys,

do have a question about hedging the thursday UK BoE Interest Rate Decision news ....

how to set pending orders at a news spike? any experiences? any ideas?

Ph.
Hero calls followed by margin calls...
  • #2,311
  • Feb 6, 2011 6:46am Feb 6, 2011 6:46am
Quoting cash4u2
Sorry, but this is not what I meant.
no problem. maybe this could be what you want.
it is simply the inherited from stochastic diff 1.4b with three pairs as input.
but iwhtout alarm an info onscreen. and the diff-calculation is different.

here i add all stochastics and divide them by three.

you have to look for yourself if you have to invert a stochastic-value.

please next time ask in another thread for indicator help or PM me, because this is not the right place for this.

have fun with it
Attached File(s)
File Type: mq4 Stochastic different three pairs 1.4b.mq4   5 KB | 1,107 downloads
  • #2,312
  • Feb 6, 2011 7:12am Feb 6, 2011 7:12am
We do not use pending orders for this strategy. We usually don't want to trade during news, but rather shortly thereafter with our method.

Quoting PhAnTi'
hey guys,

do have a question about hedging the thursday UK BoE Interest Rate Decision news ....

how to set pending orders at a news spike? any experiences? any ideas?

Ph.
  • #2,313
  • Feb 6, 2011 7:13am Feb 6, 2011 7:13am
Sounds like an interesting way to trade. May I encourage you to open a thread about it? This thread here is for the Going Home method, but I'm sure you'd have a lot of interest if you opened a thread about your method too.

Quoting cash4u2
Hi Guys,
I am also a great fan of hedging ;-)

Here I show you how I hedge "circel pairs" = GBPUSD > USDCHF > GBPCHF"
"Circel pairs" means each currency "GBP" "USD" and "CHF" appears twice in these three pairs.
GBPUSD = Buy
USDCHF = Buy
GBPCHF = Sell

or

GBPUSD = Sell
USDCHF = Sell
GBPCHF = Buy

I used no indicator at all, but it took sometimes a while to get in profit.
I used same lotsize on all three pairs and TP of 100$

One might say, hey, why did you not trade just GBPUSD and GBPCHF?
Because, it causes such a big DD which can blow...
  • #2,314
  • Feb 6, 2011 7:17am Feb 6, 2011 7:17am
Quoting Dreamliner
Sounds like an interesting way to trade. May I encourage you to open a thread about it? This thread here is for the Going Home method, but I'm sure you'd have a lot of interest if you opened a thread about your method too.
Okay, I will open a new thread "Three Pairs Hedging" ;-)
  • #2,315
  • Feb 6, 2011 7:49am Feb 6, 2011 7:49am
Hello, I would say that the indicators Stochastic diffrent 1.7 pairs in the JPY pairs have a problem with the decimal point. I tried to fix it, but I'm not a programmer, so hopefully it will be ok.
Excuse my English, I do not speak English
Attached File(s)
File Type: mq4 Stochastic different pairs 1.7_2.mq4   20 KB | 645 downloads
  • #2,316
  • Feb 6, 2011 7:57am Feb 6, 2011 7:57am
Quoting occamsrazors
Geez tomorrow comes around fast...like about only 1 hour! Wasn't expecting to see this until ummm tomorrow. The world must be speeded up where Kilian lives lol. Can't believe how fast the coders work in this thread. Good stuff Kilian!

The only issue is getting it to display where I can see it. I have to widen the chart alot to see it. If I had 4 charts on my platform it wouldn't show as they wouldn't be wide enough. But don't worry about it now...get some sleep....tomorrow is all good (earth hours not Kilian hours )
PLEASE: Download the new fixed Version.

Sorry yesterday I was to blind and tired to get this to work right. Now we even get nice values. It shows the change of the price of the last Digit of this pair!
Since EURUSD-fx has 5 Digits in my picture that would be 5.8 Pips!
I'm not sure what 1 Pip is in EURJPY, since it has just 3 Digits after the comma. (It shows the change of the price of the last Digit of this pair! Not the actuall pip value. I have to fix this as soon as I figure out what 1 pip in EURJPY is!)

If you want to move it around please change the X and Y in the settings
Attached Image (click to enlarge)
Click to Enlarge Name: Untitled.jpg Size: 131 KB
Attached File(s)
File Type: mq4 Stochastic different pairs 1.7b.mq4   19 KB | 980 downloads
  • #2,317
  • Feb 6, 2011 11:01am Feb 6, 2011 11:01am
Sorry, one more fix, now it is probably ok
Attached File(s)
File Type: mq4 Stochastic different pairs 1.7_3.mq4   19 KB | 1,051 downloads
  • #2,318
  • Feb 6, 2011 11:03am Feb 6, 2011 11:03am
How to alert signals via email with indicator Stochastic different pairs 1.4 ?
  • #2,319
  • Feb 6, 2011 11:42am Feb 6, 2011 11:42am
Quoting wallstreet03
How to alert signals via email with indicator Stochastic different pairs 1.4 ?
You need to enable email alerts in (MENU)Tools - Options - Email tab then fill out your info.

Yahoo and gmail are pretty easy, just search yahoo smtp or gmail smtp.

http://help.yahoo.com/l/us/yahoo/mai...op/pop-35.html

T
Attached Image
  • #2,320
  • Feb 6, 2011 12:30pm Feb 6, 2011 12:30pm
Quoting t1minator
You need to enable email alerts in (MENU)Tools - Options - Email tab then fill out your info.

Yahoo and gmail are pretty easy, just search yahoo smtp or gmail smtp.

http://help.yahoo.com/l/us/yahoo/mai...op/pop-35.html

T
Maybe your provider will take this e-mails as a SPAM, so donīt forget to allow it and everything is gonna be ok (that was my problem)
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