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Hedge and Correlation Strategy

  • #2,941
  • Mar 7, 2011 11:39am Mar 7, 2011 11:39am
Quoting Zr-fx
These are higher risk and higher rewards. %80 of my profits came from quads. Some of my triplets have triggered no trades at all in over a month. I am happy to stay with them but just be careful with the news and such.
Yes, high risk, high reward pairs. But better to avoid eurchf, gbpjpy pairs.

Especially eurchf with any other pair is trending a lot. For this strategy to succeed, the pair selection is important such that the PL is not trending and remain range bound.
Intraday only.
  • #2,942
  • Mar 7, 2011 1:27pm Mar 7, 2011 1:27pm
Hello to all,

my version of "Stoch Diff 2 pair EA 2011/02/16", do not close one of the two trades it opens.

Someone having the same problem ?

Regards.
  • #2,943
  • Mar 7, 2011 3:20pm Mar 7, 2011 3:20pm
Quoting gms
I have added a correlation filter to the EA. You can change the treshold with "EnterAboveCorr=".

My changes are based on the version "Stoch Diff 2 Pair EAsq 2011.03.01".

I have not tested the EA! Please test before using live!

gary
THANKS gms... I look forward to testing this.
  • #2,944
  • Mar 7, 2011 6:00pm Mar 7, 2011 6:00pm
Quoting canaleuropeo
Hello to all,

my version of "Stoch Diff 2 pair EA 2011/02/16", do not close one of the two trades it opens.

Someone having the same problem ?

Regards.
Please read the thread before you post. This has been handled in previous posts.
  • #2,945
  • Mar 8, 2011 3:36am Mar 8, 2011 3:36am
Quoting t1minator
Please read the thread before you post. This has been handled in previous posts.
Yes, but it was not fixed, isn't it ?
  • #2,946
  • Mar 8, 2011 9:05am Mar 8, 2011 9:05am
I have noted faked entrys with stoch 100,1,1 in 5M TF.
I changed to 9,1,1 - 5,1,1 but not clearity.
We must find another way of calculate correct timing entry.
I am looking with macd and/or Moving averages. Nothing clear until now.
For example with indicator "pairdifference" its "clear the entry but it "visual mode". Check EURJPY and EURNZD :
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.PNG Size: 68 KB
  • #2,947
  • Mar 8, 2011 9:22am Mar 8, 2011 9:22am
Well, humm.. If the logic is:
1.- Find High correl in pairs ( 50 periods on D1 )
2.- Find spread below 10
3.- Find no-correlated ratio in 5M. Why we used stoch instead correl() function for timing entry?
I am not coder but I think it will be good idea.
Let me testing in manual mode.

Best regards
  • #2,948
  • Mar 9, 2011 9:26am Mar 9, 2011 9:26am
Quoting AlbertoFX
I have noted faked entrys with stoch 100,1,1 in 5M TF.
I changed to 9,1,1 - 5,1,1 but not clearity.
We must find another way of calculate correct timing entry.
I am looking with macd and/or Moving averages. Nothing clear until now.
For example with indicator "pairdifference" its "clear the entry but it "visual mode". Check EURJPY and EURNZD :

As part of giving back what i have learn all this trading year, i like to introduce to you an indictor call Ichimoku Kinko Hyo fore correct timing and market entry. The parameters is 5,21,52 and color for up Kumo is Red,while down Kumo green. After some study of the way price and candle relate with cloud,then with the crosshair tool place on each candle you can get it
  • #2,949
  • Mar 9, 2011 10:33am Mar 9, 2011 10:33am
Hello alberto fx,

do you have any result on your tests ?

Best Regards.
  • #2,950
  • Edited 3:43pm Mar 9, 2011 3:08pm | Edited 3:43pm
1)Pls margin level protect

now free margin based but....

if many EA working margin is not enough....
(leverage 500:1,200:1 50:1)

ex>condition margin level<1000% open is not...

double margin_level = (AccountEquity() / AccountMargin()) * 100.0;

2)max spread
  • #2,951
  • Mar 9, 2011 7:38pm Mar 9, 2011 7:38pm
Hi... Yes... I have made a little change.

For example, I put Overlay chart with EUR/GBP and EUR/USD, then if according such graphics I see :
sell EUR/GBP
buy EUR/USD
Then I look on GBPUSD for BUYs only...I am using RSI or Stoch overbuy/oversell for entry. ( I think this point can be improved ).

Until now I have 7 win and 1 losses.
I go only for 10 pips in each entry, with 3 daily operations are 30 pips. ( enougth for "mistical" 2% daily ).
BTW, Hablas espaņol?

Quoting canaleuropeo
Hello alberto fx,

do you have any result on your tests ?

Best Regards.
  • #2,952
  • Mar 10, 2011 3:46pm Mar 10, 2011 3:46pm
Alberto,

if you are trading only one pair, you are not hedging and possibly there will be no chance for a pair 'going home' after being out of sync. Only think about a news release or something like this, the correlated pair is going up, you have sold the wrong pair.

In this case you'll have to take a SL or a larger DD. Using a triple, you have the chance to make a small DD, BE or profit, if pairs are correlating back.

Reducing traded triples to only one pair was discussed some times in the thread already.

josch
trading is war - life is simple
  • #2,953
  • Mar 10, 2011 10:10pm Mar 10, 2011 10:10pm
Looks like the pairs EURAUD and EURUSD are not sutable for this strategy. (5MTF)

see the sharp movements. i got some negative results form this pairs.
looks like AUD is not strong enough compare to eu and usd
any body have any suggestion?
Attached Image (click to enlarge)
Click to Enlarge Name: EURAUD.png Size: 55 KB
  • #2,954
  • Mar 10, 2011 11:02pm Mar 10, 2011 11:02pm
Quoting J.Inalex
As part of giving back what i have learn all this trading year, i like to introduce to you an indictor call Ichimoku Kinko Hyo fore correct timing and market entry. The parameters is 5,21,52 and color for up Kumo is Red,while down Kumo green. After some study of the way price and candle relate with cloud,then with the crosshair tool place on each candle you can get it


Hi,
which time frame you use for this settings ? one of my fav indi
  • #2,955
  • Mar 11, 2011 1:02am Mar 11, 2011 1:02am
dawjones,

check correlation. Should be 80 - 90% at least to trade a triple.

josch

Quoting dawjones
Looks like the pairs EURAUD and EURUSD are not sutable for this strategy. (5MTF)

see the sharp movements. i got some negative results form this pairs.
looks like AUD is not strong enough compare to eu and usd
any body have any suggestion?
trading is war - life is simple
  • #2,956
  • Mar 11, 2011 1:59am Mar 11, 2011 1:59am
Quoting josch
dawjones,

check correlation. Should be 80 - 90% at least to trade a triple.

josch

thank you josch for your reply.

can it be negative or positive correlated?

are the both same?

can u tell me what is the difference between negative and positive correlated.

thank you
  • #2,957
  • Mar 11, 2011 3:21am Mar 11, 2011 3:21am
Quoting dawjones
thank you josch for your reply. ....
dawjones,

trade only positive correlated pairs, this was stressed many times. of course there is a big difference. you should read something in this thread, it's worth. start with post #1 and continue at #100.

josch
trading is war - life is simple
  • #2,958
  • Mar 11, 2011 8:08am Mar 11, 2011 8:08am
Quoting josch
dawjones,

trade only positive correlated pairs, this was stressed many times. of course there is a big difference. you should read something in this thread, it's worth. start with post #1 and continue at #100.

josch

thank you very much josch
  • #2,959
  • Mar 11, 2011 9:36am Mar 11, 2011 9:36am
Quoting DojiMojo
I use all the "Triples" hedged pairs. I use the Tradable Correlations 1.8 indicator to show me all the pairs that are correlated above 75%. I have the indicator set at 1440 to give me the Daily correlation values, and I set the input "ShowOnlyHedgedPairs"=true so it only displays the "triples". I also modified the indicator to remove the volatile pairs I do not trade (GBP/JPY, GBP/CHF, GBP/CAD).
If you would like the modified indicator, just let me know.

I posted a screenshot, showing how I have the indicators & EA charts setup.

.
Hi Doji...

A very good contribution
Regarding changing the background of the Ea, can you explain how it as fact?
I've done with objects and does not work well
It is a very interesting idea.
thanks
  • #2,960
  • Mar 11, 2011 11:48am Mar 11, 2011 11:48am
For those who are trading this strategy, a piece of advice.

The corelation changes every day. You need to load tradeble corelation 1.8 indicator and check after asian open. Many of euraud basket pairs are now out of corelation.

Look for corelation above 75 and also use stocastic indicator to see the history of deviations for a week at least. This will help you to fix stoc entry in your EA.

If the DD goes beyond 20 or 25 pips, add similar or slightly bigger lot in order to average it.

If the DD goes beyond 20 to 25 pips, entry and exit should be manual for such baskets.

The key is tradeble corelated pairs. The pairs in corelation today may not be in corelation tommorrow. If you forget to see the corelation after asian open, you are like to pay the price.
Intraday only.
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