i box pips

Yeah the spread is very costly and dont forget the overnite swaps if you float!

Very costly pair to trade indeed.

yep had some lower shorts on gbp/jpy that i couldnt get rid off 2 days ago and the swaps ate so much of my profit it was insane. thats why in cases like that id rather trade eur/jpy for the smaller spread and less swaps in case i hold it and a good daily range.

so im gonna leave eur/jpy alone for now and get back to what is probably my all time favorite pair to trade. the gbp/usd . i like it for several reasons like volatility and the big daily ranges.

im gonna scale in some shorts between 8845 and 8870 with a stop around 8875-80. if it breaks resistance ill close and reverse. small retracement should happen before the up move continues.

balance currently $231.97

ehh im done for this week.


balance soemthing like 234. somethin. lol i dont feel like opening the platform

some people saying euro is done time for it to go down. some saying itl go up to 1.3000 at least. well who knows.

i could possibly buy gbp/usd right now for a possible upward bounce to mid 8900s but i think ill pass.

bias is still up on the 4h and shorter time frames but starting to get too extreme and i havent looked for divergence but im sure its there. or should be at least.
well its deff on the chart im posting.

been sick and tired and took 2 days off of work so just been relaxing. sitting at the pool watching the ladies lol.
i went on a date this weekend with a friend it was just a friendly thing with one of my close friends and she is puerto rican and very beautiful might i add so walking around downtown disney and i felt like every spanish guy wanted to kill me. it was funny little do they know what i know my username says it all. but im a pacifist and i avoid confrontations.

back to trading, gbp/usd momentum is still in uptrend. so ill be looking to buy. im long around 8840s 3 lots of 1000 and ill take profit at 20-40-60 pips for an overall of 120 pips if i get it right. trend looks like its reversing or about to change or range but wll see how it goes. 144 is showing strong support and ill use it for entries same with 89.

also trading eur/jpy, momentum is down on the 4h and i sold at 141.16 looking for 20-30 pips.

im gona bring this back. i had a little experiment going on and i stopped just kinda didnt feel like posting anymore to be honest and got really busy with other stuff.

this is a new experiment/trading system ive been testing. its about correlation.

basically i pick 2 currency pairs in this situation usd/jpy and usd/chf. they are positvely correlated about +0.84 so the basically move in the same direction most of the time. well i look for the correlation to get out of wack. when the correlation gets out of wack, i short the overperformer and buy the under performer. when the correlation gets back to normal ill make a profit. the only downside is that i dont know how far the correlation will get out of wack or when it will turn around and go to normal. thats why i use very small positions when im entering. so if it goes against me i just enter another trade.

what ill be doing is posting a small analysis of the correlation on 1h and 5 min chart and what im doing. when u enter a position and it goes against u and overall ur down on both pairs, thats normal itspart of the system. we cant predict when the future will happen but we know whats gonna happen when it does.

+0.80 is around average.

0.40 is a decent entry.

anything lower is even better

-0.20 the pairs are almost moving opposite and would make a perfect entry

in case im not around to post, when i enter a position and it goes against u, wait for the pip difference to get bigger by a decent amount before u add

basically if we enter at 0.40 and the correlation goes to 0.20 or 0 ur not gonna know unless u have the chart open. so what u do if im not around to post that, enter when the overall are losing by say 15-20 pips.

that way u get a better average and better price and u increase ur chance of making money. the thing with correlation is that it always comes back.

im gonna work with 1h and 5 min chart. 1h is more of a long term and could last a couple hours maybe a day or 2 while 5 min can last a few hours and u might be able to get anywhere between 10-20 pips all the way to 150-200 pips in 2 days if u enter say 3 times at different times and good entries.

alright analysis of tonight:

the 1h short term correlation is showin 0.34. this entry could yield some pips. but the correlation is up and goin back to normal fast.

the long term 1h is showing correlation at 0.21 and falling.

this will be a llonger term play maybe a couple hours maybe till tomorrow afternoon or so.

the over performer is usdjpy. so

sell usdjpy 117.06 and buy usd/chf 1.2365
be careful it looks like its doin a big move as we speak.
u dont have to enter at those exact numbers just enter as soon as u get a chance
thats one cool thing about this system. basically ill tell u when its a decent/good/really good entry and u can enter. just coz i say a decent entry doesnt mean its bad. enter and add to it later on to make an even better entry.

if thhose 2 trades end up in loss add to em when its a decent loss.
trade small or trade a demo so u can feel more comfortable

unrealized drawdown is part of the system. make sure u dont over leverage. and dont close the trades just coz theyr at a loss. if u wanna make some pips trading this system u gotta handle a drawdown. tahts why ill say it again trade small or a demo.

hope that makes sense for anybody thats gonna follow

I have looked into this exact way of trading. Though never really placed it all together. I always looked and then got distracted and didnt follow through. I will keep an eye on this for sure.

You think using 5 and 20 hour data is acceptable? You make mention of 1H and minute relations?

Or do the moves typically happen quickly making these larger times less effective?

Thanks for your posts,

Lets see if I have this right. Because EUR/USD and USD/CZK have -94 over the last 100 days and now are -18 on 5 HR ... I would BUY EUR/USD and SHORT USD/CZK. Then wait for the markets to re configure themselves.

Wow... lol... I am so confused. Anyway, you have me staying up and thinking. I have to sleep.

The reason I flipped the buy and sell is because they have -correlation instead of positive. Or does this not matter? Sorry to pick on ya' ... just have me interested now.

Good trading,

lol its alright man ur not pickin on me

the reason ur example wont work is coz theyr negatively correlated means theyr opposite. just coz one out performs the other doesnt mean u can sell it and buy the under performer. ur basically just doubling positions. and they can keep going against u unless u get lucky.

in usdjpy and usdchf ur selling one and buying another. but they move in the same direction most the time so one ur making money and one ur not. im usually in the red when i enter coz of spread and the fact that i dont know when correlation is going back to normal but thats why i enter small positions as the correlation gets lower and lower.

ill keep u posted and ill post updates as time permits and as long as im not busy.

but using 5h and 20h date should work
just find 2 pairs that are very positively correlated like eur/usd and gbp/usd is a good example. and then plot em together on the same chart or theyr data and see which one is outperforming the other. and u dont even need correlation u can sell based on the 2 being on charts. just look at the one thats higher and make sure theres a big difference then sell the one that is higher and buy the one that is lower. the correlation indicator helps see when correlation is dipping and how far it goes and when it turns around. is just like an rsi. better visual thats all. except it always comes back to average so when the correlation gets out of wack keep entering because itl come back

right now the position i said to enter previously is prob a few pips in the red. thats normal. just add to it right now if u can.

the long term 1h went as far as -0.10 and right now at -0.01. that makes it a pretty good entry. so again sell usdjpy and buy usdchf. theyl prob go back to normal in the next 10h and u should make some pips if eveyrthing goes right. lets see how it goes

What is the correlation indicator?

Okay, I got ya', + correlation. I am sure more trading opportunities come up on the 1H and Minute charts. Thanks for sparking my interest again in this. Outside of news I normally only trade about 3,4 times a month on very conservative setups. I am sure a trade of this strategy comes about at least a couple times a week. Some are obviously better to plays than others. I like conservative approaches... : ).


Good trading,

the correlation indicator is based on an equation that basically shows how pairs move in relation to each other.

the average correlation of usdchf and usdjpy is about 0.84
while for example eur/usd and usd/chf are about -0.96

the correlation varies between 1 and -1

closer to 1 means they move almost exactly in the same direction. while -1 means exactly mirror like eur/usd and usd/chf

anything in between u can judge on how that would work.

close to 0 means pairs are doin theyr own thing and not moving in a mirror way or same direction.


jay i agree i prefer conservative approaches so i think im gonna stick to 1h charts. they provide better entries and less trades a day or a week actually.

right now correlation is about 0.81 so pretty close to average. im still working on a better entry and less drawdown.

nothing for now when correlation heads to 0.40 and lower ill update and start entering positions.

this is all still just a test but with ur help and snuffle and anybody else we might be able to find something interesting as i tested it myself on the 1h and visually backtested it and it yielded 100+ pips a week easy and thats adding an extra 10 20 pips for slippage and spread even though thats already included in the 100+ pips.

Hi boxingislife,
I'm Italian too..Good trading

When you said "indicator", I thought you were using an actual indicator on a chart the shows you the correlation at that point in time. That would allow us to catch points when one pair lags in correlation so we can enter a trade and wait for it become correlated again and take profit.

I generally use mataf.net analysis-correlation just for reference... then I will look up the pairs on my broker chart.

yea snuffle its an actual nidicator like rsi or stochs its real time plotted on chart.

What is the name? I recall you said you use Accucharts in FXSol. I don't have a live account, so I don't have access to it. If the indicator has a name then maybe it can be found elsewhere.....like for MT4.

it is called correlation function. after alot of searchin i havent found anything for mt4

if u do though feel free to post it

http://www.strategybuilderfx.com/sho...ht=correlation

See that thread about the correlation indicator for EURUSD & USDCHF.