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  • #4,341
  • Oct 8, 2012 6:11am Oct 8, 2012 6:11am
Hey Guys

Nice thread you have here. I'm now reading it from the begining and I wanted to ask you question.

Lets assume that price creates rounded test into marked PPZ on GBPCAD. What will you do? Sell this PPZ with touch trade or wait for some PA? I know that Wizard talked about selling support and buying resistance after they break but is level created by one bounce to upward good enough to consider this as possible TT entry? If there were 1 or 2 upward bounces more from that PPZ I would already put my sell limit there, but after rounded test from 19th Sep, second approach into this PPZ just went through with small consolidation on M15 chart.

There's similar but much better setup on GBPUSD but I would like to know what do you think about this GBPCAD scenario.

Cheers
Attached Image (click to enlarge)
Click to Enlarge Name: gbpcad h4.gif Size: 27 KB
  • #4,342
  • Oct 8, 2012 6:16am Oct 8, 2012 6:16am
Quoting Audioslave
Hey Guys

Nice thread you have here. I'm now reading it from the begining and I wanted to ask you question.

Lets assume that price creates rounded test into marked PPZ on GBPCAD. What will you do? Sell this PPZ with touch trade or wait for some PA? I know that Wizard talked about selling support and buying resistance after they break but is level created by one bounce to upward good enough to consider this as possible TT entry? If there were 1 or 2 upward bounces more from that PPZ I would already put my sell limit there, but after rounded...
The Wizard would want 3 previous touches of that level in order to take a TT there. If there are less than 3 touches, we need confluence at that level in order to justify taking a TT. The confluence that Wizard uses is ATR, Daily bias or an SFP.

Also be wary that this is a cross pair which tend not to be as reliable as the majors. I still trade crosses but I want to see a lot stronger level than this one in GBPCAD.
  • #4,343
  • Oct 8, 2012 6:34am Oct 8, 2012 6:34am
Just as I suspected but that former strong resistance at that level mixed me up. It was good for TT for long back then after break and rounded test, but now it doesn't look so good for TT sell.

Thanks M
  • #4,344
  • Edited 8:39am Oct 8, 2012 6:43am | Edited 8:39am
Hi folks,

Another correlation indicator I've cooked up. This time its a multi-time frame, multi-symbol.

Same installation instructions as last time.

  1. DLL in the libraries folder
  2. ninety47_correlation_matrix.ex4 in the indicators folder.


To run it:

  1. Select the time frames you want the correlation for.
  2. Specify the period to run the correlation for, for each time frame.
  3. Supply a string of symbols e.g AUDUSD,AUDNZD,AUDJPY


Send me any questions either via the thread, by twitter or PM.

Enjoy,

ninety47

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd_corr_matrix_demo.jpg Size: 75 KB
Attached File(s)
File Type: zip ninety47_correlation_matrix.zip   19 KB | 297 downloads
  • #4,345
  • Oct 8, 2012 6:53am Oct 8, 2012 6:53am
Quoting Audioslave
Just as I suspected but that former strong resistance at that level mixed me up. It was good for TT for long back then after break and rounded test, but now it doesn't look so good for TT sell.

Thanks M
Correct.
  • #4,346
  • Oct 8, 2012 7:03am Oct 8, 2012 7:03am
Nice work 9047, correlation in relation to indices and commodities would also be great if possible?

Quoting 9047
Hi folks,

Ano correlation indicator I've cooked up. This time its a multi-time frame, multi-symbol.
  • #4,347
  • Edited 8:15am Oct 8, 2012 7:30am | Edited 8:15am
Hi SmartMoney1,

If your MT4 platform has a symbol for it you can get the correlation for it.

For example with my broker I have CFDs for:

  1. S&P500
  2. FTSE 100
  3. ASX 200
  4. DOW JONES 30
  5. DAX 30
  6. CAC 40


They each have the follow symbols:

  1. S&P
  2. FT100
  3. SPI200
  4. DJ30
  5. DAX30
  6. CAC40


To correlate them with the symbol on the target chart I just set the symbols parameter (see attached screenshot) to:

  1. S&P,FT100,SPI200,DJ30,DAX30,CAC30


Note: These names are the same names that appear in your market watch panel.

But please note if you already have the indicator attached to your chart you my have to remove it from the chart and re-attach it with the new symbols parameter.

Hope that helps.

Regards,

ninety47

Attached Image
  • #4,348
  • Oct 8, 2012 8:19am Oct 8, 2012 8:19am
Quoting 9047
Hi folks,

Another correlation indicator I've cooked up. This time its a multi-time frame, multi-symbol.
Hey ninety47, thanks for the indicator work.

I think the link still contains the first version, filename: ninety47_correlation.ex4

Please can you check

Thanks
  • #4,349
  • Oct 8, 2012 8:41am Oct 8, 2012 8:41am
Quoting mikeyj22
Hey ninety47, thanks for the indicator work.

I think the link still contains the first version, filename: ninety47_correlation.ex4

Please can you check

Thanks
Hi Mikey,

My bad but fixed
I've upload the correct zip file to the post (and attached it here).

Thanks!
Attached File(s)
File Type: zip ninety47_correlation_matrix.zip   19 KB | 305 downloads
  • #4,350
  • Oct 8, 2012 9:53am Oct 8, 2012 9:53am
Quoting 9047
Hi Mikey,

My bad but fixed
I've upload the correct zip file to the post (and attached it here).

Thanks!
Many thanks for sharing it man!
  • #4,351
  • Oct 8, 2012 2:15pm Oct 8, 2012 2:15pm
Good man, perfect, thanks ninety47, good luck with your trading (luck doesn't come into trading though as some one much wiser than me once said!)

Quoting 9047
Hi SmartMoney1,

If your MT4 platform has a symbol for it you can get the correlation for it.

For example with my broker I have CFDs for:

  1. S&P500
  2. FTSE 100
  3. ASX 200
  4. DOW JONES 30
  5. DAX 30
  6. CAC 40


They each have the follow symbols:

  1. S&P
  2. FT100
  3. SPI200
  4. DJ30
  5. DAX30
  6. CAC40


To correlate them with the symbol on the target chart I just set the symbols parameter (see attached screenshot) to:

  1. S&P,FT100,SPI200,DJ30,DAX30,CAC30


Note: These names...

  • #4,352
  • Oct 8, 2012 2:22pm Oct 8, 2012 2:22pm
I have a suggestion ninety47, how about weekly and monthly timeframes too for the correlation matrix?

Could you give us a brief overview of how you utilise this tool within your own trading?

cheers
SM

Quoting 9047
Hi SmartMoney1,

If your MT4 platform has a symbol for it you can get the correlation for it.

For example with my broker I have CFDs for:[list][*]S&P500[*]FTSE 100[*]ASX 200[*]DOW JONES 30[*]DAX 30[*]CAC 40


ninety47
  • #4,353
  • Oct 8, 2012 5:50pm Oct 8, 2012 5:50pm
D1 Bearish Inside Bar Bias.
Possible H&S H1

Attached Image (click to enlarge)
Click to Enlarge Name: EN.jpg Size: 66 KB
  • #4,354
  • Edited 7:21pm Oct 8, 2012 6:47pm | Edited 7:21pm
Hi All,

I've added in the extra time frames, weekly and monthly. (Zip file attached).

How should the indicator be used

  1. Firstly, if your unfamiliar with idea of correlation read up on it (see wikipedia, wolfram etc).
  2. Second its very important to understand that correlation does NOT imply causation e.g. its does not imply that movement up in the EURUSD is causing the negatively correlated USDCHF to move down.
  3. It does tell us that these for the last N bars (the period) on a give time frame that the symbols are moving similarly.
  4. Correlation on its own is not a trading signal.


So just to re-iterate correlation isn't going to tell us when to buy or sell. However we can use the correlation as a guide to chose which set-ups we trade. For example if you see a set up in the AUDUSD and you're currently short in the USDCHF you can use the correlation as a risk management tool. At the time of writing this the 90 bar H1, H4 and D1 correlation for the USDCHF and AUSUSD is uncorrelated (the values are grey). Meaning you are less likely to be over leveraged if you take a position (long or short) in the AUDUSD. Conversely if you took a long position at the same time in the EURUSD which is strongly negatively correlated (the values are red) with the USDCHF on the same time frames - then you'd effectively be doubling your risk. Why? because on the time frames that matter to your trade the EURUSD and USDCHF are moving similarly (albeit in different directions).

NB: If you are interested in determining if causal relationships exist between two currency pairs then you will want to read up on statistical arbitrage and co-integration. There are some threads on FF devoted to these topics.



Hope that make sense.

Regards,

ninety47

Attached Image
Attached File(s)
File Type: zip ninety47_correlation_matrix_v1.1.zip   19 KB | 399 downloads
  • #4,355
  • Oct 9, 2012 9:28am Oct 9, 2012 9:28am
Makes perfect sense, thanks for your reply Ninety47.

Quoting 9047
Hi All,

Hope that make sense.

Regards,

ninety47
  • #4,356
  • Oct 9, 2012 3:35pm Oct 9, 2012 3:35pm
This could be nice.

One thing i don't like is that blue line i marked (@0.9557). This is daily close resistance, broken right now. From FXPro datafeed, which i know a lot of you guys use for charting. I don't like when those daily close res/sup are so far from highs/lows which creates nice looking ppz. But wait - on my broker's feed daily close perfectly matches this ppz on h4 chart.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: cadchf h4.gif Size: 23 KB
Click to Enlarge Name: 12.10.10 cadchf d a.gif Size: 15 KB
  • #4,357
  • Oct 9, 2012 5:07pm Oct 9, 2012 5:07pm
Quoting Audioslave
This could be nice.

One thing i don't like is that blue line i marked (@0.9557). This is daily close resistance, broken right now. From FXPro datafeed, which i know a lot of you guys use for charting. I don't like when those daily close res/sup are so far from highs/lows which creates nice looking ppz. But wait - on my broker's feed daily close perfectly matches this ppz on h4 chart.
It's a bit choppy on the 4hr/1hr...would be something to watch if we can get some room in between the breakout before coming back to retest.
  • #4,358
  • Oct 9, 2012 6:34pm Oct 9, 2012 6:34pm
Quoting Audioslave
This could be nice.

One thing i don't like is that blue line i marked (@0.9557). This is daily close resistance, broken right now. From FXPro datafeed, which i know a lot of you guys use for charting. I don't like when those daily close res/sup are so far from highs/lows which creates nice looking ppz. But wait - on my broker's feed daily close perfectly matches this ppz on h4 chart.
Like Sam said its choppy plus the daily level doesn't have much space between the touches. So it might work but not one I'd take.
  • #4,359
  • Oct 10, 2012 5:28am Oct 10, 2012 5:28am
Hi 9047,

Wanted to PM you but I believe you may have this disabled. Firstly thanks for sharing the Indi, very useful. I'm just trying to get it working and have downloaded and installed it. However when I insert the indicator, the matrix appears however all the coefficients show zero values.


Any idea why this might be happening?

Sorry, but I cant seem to post the image, I will try to do so in the meantime.

Thanks in advance.
  • #4,360
  • Oct 10, 2012 5:34am Oct 10, 2012 5:34am
Hopefully you can see this.

Thanks
Attached Image (click to enlarge)
Click to Enlarge Name: mtf correlation matrix.gif Size: 60 KB
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