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Trading system using relative strength

  • #2,261
  • Nov 19, 2011 11:02am Nov 19, 2011 11:02am
Quoting Hugh Briss
I would suggest that you weed out a few of the more correlated pairs such as not opening too many yen crosses as they do tend to move together. Also commodity currencies are good ones to watch, aud and nzd are usually highly correlated.
I can't test this right now because markets are closed, but this might be a good tool to check out correlation between pairs and the strength of the correlation: correlation calculator. It has correlation tables for M5, H1, D1 and W1 TFs.
  • #2,262
  • Nov 19, 2011 3:17pm Nov 19, 2011 3:17pm
Quoting ForexIdiot
I can't test this right now because markets are closed, but this might be a good tool to check out correlation between pairs and the strength of the correlation: correlation calculator. It has correlation tables for M5, H1, D1 and W1 TFs.
Ok, thanks. I'm always a bit wary of calculators like that because sometimes they pick out certain pairs that are supposedly correlated when in actual fact they are just moving in a similar way coincidentally. It might be best just to work out what pairs are correlated in general such as aud/nzd, eurusd/gbpusd/audusd, etc. Also we need to be aware of negative correlations such as eurusd/usdchf, audusd/usdcad.

On the whole I think as long as your basket is sufficiently spread out then you should be ok, I only mention correlation because if you have too much correlation in your basket all you are doing is multiplying your risk. Admitedly you are multiplying your gains as well when it goes your way but the whole idea of basket trading is to even out your risk and to avoid unnecessary and excessive risk exposure.

Incidentally I have altered the above rules somewhat. I am now using 100 sma, 50 sma and 3 sma typical price to take trades in the direction of the overall trend and have strong s/r levels marked. I have also added a 2000 period ATR to calculate the broad average 4 hour candle size for each pair and set a trailing stop for each pair at 1 atr. When the trade gets to break even I will stop trailing and let these trades run for as long as they will go. Let's see how this works out.
  • #2,263
  • Nov 19, 2011 7:07pm Nov 19, 2011 7:07pm
Quoting ForexIdiot
I wonder if anyone has tried trading only the currency pairs that have the highest score. For example, in the attached pic the Aud has a red-2 while everything else has a 1. You'd only trade the pairs where you are shorting the Aud paired with currencies that have a green-1 or more.
Setting the indicator Trade Level to 2, rather than it's default of 1, would show only level 2 or higher level trades. Anything with only one bar, either red or green, would be ignored. Setting the Trade Level to 3 would ignore levels 1 and 2, and so on. Depending on the time frame used, there may be no trades, especially at the higher levels and shorter time frames, and you'd just wait for the next set of signals.
That being said, the results of my testing using the various CCFp-Diff indicators, regardless of the Trade Level utilized, and without using a secondary confirmation of some sort, do not provide signals that are consistent enough to trade profitably, at least not on the D1 time frame. I'd have to agree that a fairly definite trend for each currency pair must be determined, and place only those trades that are in the direction of the trend. As I am currently only able to trade D1, I will take the next few weeks to test if the theory holds true. I'd love to hear of anybody else's results, too.

Curtis
  • #2,264
  • Nov 21, 2011 11:09am Nov 21, 2011 11:09am
Just to keep anyone interested informed I have a basket floating around 800 pips up. I started opening trades at 7am and took more at 11, 3 and 7. (my broker is Alpari so the 4 hour candle opens 1 hour before gmt).

If anyone good at EA's is reading I have an urgent request here...

http://www.forexfactory.com/showthre...55#post5152655

for an EA that would trail the total number of pips as a collective trailing stop. So if you went 800 pips up and the basket went back to 600 pips up it would close all open trades. Obviously the trailing stop needs to be adjustable. I'm hoping someone can help as that would be really useful.
  • #2,265
  • Nov 21, 2011 8:49pm Nov 21, 2011 8:49pm
Quoting Hugh Briss
Just to keep anyone interested informed I have a basket floating around 800 pips up. I started opening trades at 7am and took more at 11, 3 and 7. (my broker is Alpari so the 4 hour candle opens 1 hour before gmt).

If anyone good at EA's is reading I have an urgent request here...

http://www.forexfactory.com/showthre...55#post5152655

for an EA that would trail the total number of pips as a collective trailing stop. So if you went 800 pips up and the basket went back to 600 pips up it would close all open trades. Obviously...
Steve Hopwood's Multi-Purpose Trade Manager does what you're asking for, though the basket TS works in dollars, not pips. I use it to manage my basket trades and it works flawlessly. It has been posted more than once in this thread, and can also be found here:

http://www.forexfactory.com/showthread.php?t=89371

though he states as of yesterday that he has moved further development to his own forum.

Curtis
  • #2,266
  • Nov 21, 2011 11:18pm Nov 21, 2011 11:18pm
Quoting CurtisW
Steve Hopwood's Multi-Purpose Trade Manager does what you're asking for, though the basket TS works in dollars, not pips. I use it to manage my basket trades and it works flawlessly. It has been posted more than once in this thread, and can also be found here:

http://www.forexfactory.com/showthread.php?t=89371

though he states as of yesterday that he has moved further development to his own forum.

Curtis
I've seen that but I didn't think it did do what I wanted. I'll take another look, it's not obvious how to use it because it says you need one of the top options set about comments or magic numbers for it to work?

Could you do me a favour and tell me your exact settings? Thanks
  • #2,267
  • Nov 22, 2011 7:13pm Nov 22, 2011 7:13pm
Quoting Hugh Briss
I've seen that but I didn't think it did do what I wanted. I'll take another look, it's not obvious how to use it because it says you need one of the top options set about comments or magic numbers for it to work?

Could you do me a favour and tell me your exact settings? Thanks
Except for the following, all other settings are default:

First of all, I set AlwaysOn to false. I was unable to revise settings after initial setup when set to true.

I set ManageByTradeComment to true, and for TradeComment I provide short description of my basket (RS1440, in my case). Double check that your trade comment is entered when you place each trade. The EA can't track it otherwise.

In the Basket trade settings section:

Basket take profit settings:

ManageBasketTrades: true
BasketClosureTP: true
BasketTPinDollars: true
BasketDollarTP: 1000.0 (your choice)

Basket stop loss settings

BasketClosureSL: true
BasketSLinDollars: true
BasketDollarSL: 3000.0 (your choice)

Basket trailing stop settings

BasketTrailingStop: true
BasketTsAtProfit: 300.0 (your choice)
BasketTrailPercent: 75.0 (your choice)

These settings are used for fixed lots of 0.10. For 0.01 fixed lots, I divide the dollar amounts by 10.

These are the settings I use currently on one of my demo accounts, though I do revise them at times I have never had my TP or SL hit. I either let the trailing stop do its job, or I'll manually exit the basket if it seems to be going nowhere.

I hope this helps.
  • #2,268
  • Nov 22, 2011 10:08pm Nov 22, 2011 10:08pm
Quoting CurtisW
Except for the following, all other settings are default:

First of all, I set AlwaysOn to false. I was unable to revise settings after initial setup when set to true.

I set ManageByTradeComment to true, and for TradeComment I provide short description of my basket (RS1440, in my case). Double check that your trade comment is entered when you place each trade. The EA can't track it otherwise.

In the Basket trade settings section:

Basket take profit settings:

ManageBasketTrades: true
BasketClosureTP: true
BasketTPinDollars: true
BasketDollarTP:...
That's great thanks, I'll give it a try.
  • #2,269
  • Nov 23, 2011 12:21am Nov 23, 2011 12:21am
I found this which seems to work really well, possibly better than the one at the start of the thread???
Attached File(s)
File Type: mq4 xMeter Indicator3.mq4   12 KB | 1,847 downloads
  • #2,270
  • Nov 29, 2011 8:46am Nov 29, 2011 8:46am
For the information of anyone interested you CAN just take a bunch of trades with the trend and manage them to pull a profit. I know because I have a 1200 pip basket as I write. My method is to use strong s/r on weekly charts and trade bounces with the trend on daily charts. I also use trendlines. I'm not fussy what time of day I enter, if it looks like it's going to move I jump on. I take trades on all pairs that look good simultaneously, dump the bad ones and hold the good ones. Works a charm so far. My ultimate goal is to have a perpetually moving basket with good trades dropping out as they hit tp or trailed sl and bad trades dropping out for minimal losses. Like a never ending profit machine. Nice. Oh, and not a relative strength indie in sight!
  • #2,271
  • Dec 12, 2011 8:44am Dec 12, 2011 8:44am
Hi guys I'm trying to attach the indicator to my chart but my broker has a suffix of more than 7 letters, which is what the indicator was modified to.

Mine pairs actually show as EURUSDmicro with micro as the suffix.

Can't get my lines or histograms or anything to show up.
Any help?
  • #2,272
  • Dec 16, 2011 5:01pm Dec 16, 2011 5:01pm
Is anyone still looking at this thread? I'd like to see we if we can improve on this system



My first week live on this system pulled in 340 pips even though I could have closed with 500+. Still, quite profitable and I'm sure many people dream of catching 340 pips a week with other systems
  • #2,273
  • Dec 16, 2011 9:11pm Dec 16, 2011 9:11pm
This is interesting. Keeping a eye on this thread.
PIP'N
  • #2,274
  • Dec 16, 2011 11:09pm Dec 16, 2011 11:09pm
This is a great thread but noone posting anymore. If you're interested in basket trading take a look at my thread here.

http://www.forexfactory.com/showthread.php?t=330762
  • #2,275
  • Dec 17, 2011 12:01am Dec 17, 2011 12:01am
Good stuff man! I've been using CCI on 1-hour charts using the same basic theory when pairs during momentum-induced movements, and while the indicators look different they give the same signals. Just remember not to rely on this method during ranging movements. All the best!
  • #2,276
  • Dec 17, 2011 12:40pm Dec 17, 2011 12:40pm
When I filter out the ranging markets with my analysis from the signals I believe this is the best system I have ever used
  • #2,277
  • Dec 17, 2011 9:13pm Dec 17, 2011 9:13pm
Quoting ahendon
Are we looking simply for the +/- symbols or are we interested in there relative position to the mid line. For example this morning the attached signal came up - the JPY, for example is a - but is the highest above middle 0 and AUD is + even though it is the lowest below middle 0. Do you trade as JPY is weak and AUD is strong even though graphically the opposite is indicated? THe question is: does the position of theline factor into the deciscion or is all +/-?
Ends of liines are turning up or turning down regardless of where they show up in relation to each other or the 0 line.
  • #2,278
  • Dec 18, 2011 11:08pm Dec 18, 2011 11:08pm
Quoting CurtisW
Setting the indicator Trade Level to 2, rather than it's default of 1, would show only level 2 or higher level trades. Anything with only one bar, either red or green, would be ignored. Setting the Trade Level to 3 would ignore levels 1 and 2, and so on. Depending on the time frame used, there may be no trades, especially at the higher levels and shorter time frames, and you'd just wait for the next set of signals.
That being said, the results of my testing using the various CCFp-Diff indicators, regardless of the Trade Level utilized, and without...
Curtis: I thought I agreed with you, as I have conducted trials on demo with various CFFp-Diff indicators, and I too, am trying with the daily chart. Since the market opened today (Sunday for me), CFFp-Diff_[v2.0] has on level 5 provided two trades which, though they went negative for a while, have become quite positive. I guess my indicator won't refresh until the next daily candle opens about 14 hours from now. I'm going to leave the trades on over night (for me) and report back. We shall see.
  • #2,279
  • Dec 19, 2011 2:01am Dec 19, 2011 2:01am
I guess I am going to make a fool of myself by posting so much, but I'm a little excited right now. If you move out one of the indicators to the monthly time frame and take a look at the LINES only... you will get a clear idea of the strength of the individual currencies. For example, you will see the giant rise of this past summer of the Swiss franc, followed by the great drop, and you will see that currency rising, turned up from the bottom somewhat, now.

Then, look at the JPY, or the GBP; you will see those turning down.

Even someone like myself, a beginner who lost a lot because of an insistance NOT to use demo, who has finally gone onto demo out of an utter determination to learn a system, practice it and then move to live..... can use the knowledge I've gained over the past four months and actually construct trades using those lines alone.

For example, buying CHFJPY is working at the moment, as are two other trades suggested at a high level of quality (eliminating lesser quality alternatives, which another indicator does when you chose various levels). That trade, which I "invented" myself just using the lines, is now up over $100. The other two are past large - I am up $700 plus right now ... of course the trade size, 1 lot, is more than I can afford on live.

Hope this encourages others to check this thread out.
  • #2,280
  • Dec 19, 2011 2:07am Dec 19, 2011 2:07am
Quoting Greenstar
I guess I am going to make a fool of myself by posting so much, but I'm a little excited right now. If you move out one of the indicators to the monthly time frame and take a look at the LINES only... you will get a clear idea of the strength of the individual currencies. For example, you will see the giant rise of this past summer of the Swiss franc, followed by the great drop, and you will see that currency rising, turned up from the bottom somewhat, now.

Then, look at the JPY, or the GBP; you will see those turning down.

Even someone like...
Any method you use to take trades with the trend will work out well.
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