Hedge and Correlation Strategy

good...

Hi duca! EurUsd Pip value is different from UsdChf....so i think that u have to correct size for a correct hedge.....
Butg maybe i could be wrong

with fxpro only 0.1, 0.2, .0.3 ........ lots......

duca,
are you using any EA? Can i know your setup? What indicators, EA and settings you're using?

Hi You Guys, very new to this but this looks like an interesting thread. Just wondering what the best chart overlay tool to use now is. I've seen the first posts from 2009 with codebase on there. Has that been superceded now? Thanks for any help.

Duca, please.

i don't use the EA-
only manual

but i see that you have a lot of indicators on your charts. May i know which are the must useful for that kind of trading? Are you following a type of strategy that i can find written somewhere? or is it your own?

The strategy of this thead-
should read everything before asking

trend EUR/GBP UP =
uncorrelation -
EUR/$ UP - GBP/$ down

Duca , what is the red line in your charts?

Hi everyone
I had testing a theory for several months about complementing eurgbp /correlation eu ,gu ,when the pair is suffering considerable DD. Many times the pairs retrace back into profit, but the waiting time is lengthy at time..sometimes trades stretches into weeks...to a month. Then i thought about trades that could have flown away without returning back into normal correlation. Sorry for ppl who wont understand if your new this game, those old playa will get it.Im thinking of this crazy theory to upgrade the original idea/method of this thread ,for those crazy dd's and time wasted waiting for the trades to go into profit...bla bla bla
Pairing
1) EURUSD GBPUSD + positive correlation /EURGBP
2) CHFJPY USDCHF - negative correlation,pair mirroring = 1 not -1 /USDJPY
3) AUDUSD NZDUSD + positive correlation /AUDNZD
4) CADJPY CHFJPY + positive correlation /CADCHF

My test)
1) Wait for signal,Trade with EURGBP...it went into dd...maybe -50pips or so
2) Wait for signal ,Trade with USDJPY ,to decrease dd....went into DD too
3) Wait for signal ,trade CADCHF after adding this the dd could decrease a lot...in rare instance those 'three' trades could went into further dd go to no. 4.
4) Wait for signal, trade with AUDNZD or trade audusd nzdusd for better spread... wait for dd to decrease.

What usually happens was that a pair went into dd, a hedge trade is then made..which the hedge is in profit later, then trade the hedge again...
...lets say short eurgbp = -120p, made a short usdjpy trade later..went into profit = 60p, then another signal usdjpy came up trade long usdjpy went into profit = 50p, the short eurgbp now is = -90p....close all trade. So overall profit is +20p...that occurs in 5 days of trading.
If i waited for eurgbp trade only ,it could be several weeks max before i could close in profit.

The plus) my take...
1) Diversification ..the only free lunch perhaps
2) Time into profit efficiency is increased
3) Less heartache..less patience
4) No need for stops
5) Trades all major pair...there about 8 currencies there think about it

The minus)
1) Sometimes diversification increase the dd instead of reducing it...eg..eurgbp pair in minus., usdjpy pair also in minus, cadchf in little profit, audnzd... no signal/// that kind of thing never happen in my demo trades..still in theory /demo anyways
2) More time to get into profit...refer above
3) Margin call?? who knows
4) Maybe not enough diversification? more pairs to complete the almost perfect hedge?
5) Maybe this theory is completely unnecessary or useless at all
6) Wrong lot sizes...hard to compute..each pair has different volatility,correlation,base pair, pip/dollar ratio..etc
7) Unknown factor...

Now tell me if i have been wasting time with this theory..or are this thing worth something..the goal here is to make profit in the least possible time
,with the least possible drawdown, with the least possible trades, without costing the account completely.
Im sure this theory is not new for some traders...but if this is detracting from the current thread or should be moved, i will delete this post and keep it to myself. After all this is some crazy theory..bla bla bla

If you had a hard time comprehending whatever im posting above, dismiss this idea pls. Dont waste your time.If you have a way to improve from this crazy , feel free to addon to this madness.

MA 40 simple

you can put a graph?-

is better understood, thank you, hello

hey duca,

interesting stuff you have here. I am trading something similar:

look for correlated pairs ( EUR/USD and GBP/USD) and wait when they stop moving the same direction.

And then I trade the direction when they move back together. That's what you doing as well right?

http://s1.directupload.net/images/12...p/vp6sndkr.gif

is better:
gbp/$ long-
€/$ sell