Correlation - please come home

Hello everyone ....

I am opening this thread becouse I need opinions from people who understand correlation ....
I started to dedicate myself to this subject not long, and it seems to me that for those who understand is a great opportunity to profit from this particular gap ... well.... let me explain my strategy and how I see CORRELATION .. ...

This strategy uses the principle that some couple of pairs run together almost all the time .... does that mean at some point they will turn away, but in future they will meet again .....
My strategy takes advantage of this particularity ... BUT ... it will only work if this is true, thats is why i need help.... this is the strategy .....i'm testing in demo, everything is good so far....


I open 4 trades simultaneously using the correlated pairs AUD/USD EUR/USD...they are:

1 - Buy AUD/USD
2 - Sell EUR/USD

3 - Sell AUD/USD
4 - Buy EUR/USD

....that way I do not have to worry about which way the market will go ... I just worry about how the pairs will divert .... Ok .. so I wait until one of the correlations to generate profit (all 4 spreads + profit)....exemple:

1 - Buy AUD/USD -10
2 - Sell EUR/USD +30

3 - Sell AUD/USD +10
4 - Buy EUR/USD -30

....i close the profit one ( 1 and 2 ).....with +20....and wait till 3 and 4 meet again...And now, no matter what the value of the correlation, but only if that they will be balanced...and close bouth ...let's say....


3 - Sell AUD/USD -20
4 - Buy EUR/USD +20

let's assume that is a 1 value spread per pair....so my profit was -4 spread+20= 16

I've tested it and know that this equilibrium will happen regularly ... and still not cacth one case in that the price dont meet in future....
but the big problem is that once prices continue to diverge and not return home, this could result in loss of all profit from previous trades.
My goal is in the intraday....5 to 20 pipis per trade....how far the prices can divert and not get back in this scale?
So any help from you guys that understand about correlation can give me would help a lot ...regards!!!!

Open a chart of EUR/AUD. You will find that it shows when the correlation comes home versus when it doesn't

Tks very much Adal....that is a very important thing that i didn't realised....but I tried some indicators, none can overlay three pairs ..... any tips on finding those points where the pairs meet? tks again