Hedge and Correlation Strategy

Update:
Could only get this working on the M1 chart. Output was confusing.
Couldn't get JM_Divergence-001 to work???
This won't work because because I want to see both EURUSD hit an extreme, and GBPUSD hit an extreme, not just EURGBP hitting an extreme, as that could indicate only one of the pairs hitting an extreme.

How many times does it have to be explained that this stuff doesn't work? Stop wasting your time and learn to trade.

Isn't it funny how some people who won't try this, condemn it? That's good news for the rest of us.

After having a few trades turn to a loss because they weren't being closed properly, I patched the EA (StochDiff 2 Pair) and it's working fine. Here is the patch:

void CloseTrades() {
for (int i = OrdersTotal()-1;i>=0; i--) {
OrderSelect(i, SELECT_BY_POS, MODE_TRADES);
if (OrderMagicNumber() == MagicNumber) {
if (OrderType() == OP_BUY) {
while(IsTradeContextBusy()) Sleep(100);
RefreshRates();
double buycloseprice = MarketInfo(OrderSymbol(), MODE_BID);
string buySym = OrderSymbol();
double buyProfit = OrderProfit()+OrderSwap()+OrderCommission();
OrderCloseReliable(OrderTicket(), OrderLots(), buycloseprice, Slippage, White);
}
if (OrderType() == OP_SELL) {
while(IsTradeContextBusy()) Sleep(100);
RefreshRates();
double sellcloseprice = MarketInfo(OrderSymbol(), MODE_ASK);
string sellSym = OrderSymbol();
double sellProfit = OrderProfit()+OrderSwap()+OrderCommission();
OrderCloseReliable(OrderTicket(), OrderLots(), sellcloseprice, Slippage, White);
}
}
}

The author was closing the orders in the wrong sequence and fiddling with the "for loop" index to compensate.

I'm trading the 11 combinations (22 pairs) recommended by Ckp with much success. I trade each combination in a different account. Every day is "net" profitable, although some accounts (of course) lose money. Diversity, IMO, is required to profit from this strategy.

So far, I'm running with no stops. I haven't been bothering with "selecting" pairs using websites or indicators, but I'm probably going to start being more selective.

Can you post the patched EA?

Thanks

Dear ChuckNZ

Plz share the modified EA so that we can test it ...thanks

Hello,
Which 11 combinations (22 pairs) did ChuckNZ mean?
Greetings,
halobungie

Guess your "googler" must be broken. You could search for Stoch Diff 2 Pair EAsq-Time Filter or go to post 3860 to find the source code that I modified as described above.

I'm sorry, but I can't give you my version of the source code. I have spent over 400 hours enhancing it. Quite happy to supply you with bug fixes, but hope you appreciate that I can't give away my source.... even though it started with someone else's source.

I mentioned "11 pairs" that I was trading. The 11 pairs were recommended by Ckp:

EURCAD EURUSD
EURJPY EURUSD
EURAUD EURCHF
EURAUD EURUSD
EURCHF EURJPY
GBPJPY GBPUSD
AUDCAD AUDUSD
AUDCAD AUDJPY
USDCHF CADCHF
AUDUSD AUDCAD
EURUSD EURCAD

Since my post about the 11 pairs, I now run an EA every hour that goes through 626 pairs to select which ones are "tradable". The EA makes the selection based on correlation (two periods), stochastic difference, spreads at broker I intend to use, etc.

I'm currently modifying Stoch Diff 2 Pair EAsq-Time Filter to automate the process of selection, then trade the two pairs until exit, then select next pairs, etc.

My trading needs to be 100% automated as I don't have time to babysit trades.

Hello ChuckNZ,
Thank you for your Replay.
How can i send you a private Message?
Greetings,
halobungie

Hi ,

does any one has pdf file or any format includes a summary of this strategy ..???
What is the last set of indicators & template used with this strategy .

Would some one please explain ...!!!!

Hello,
can someone tell me what is:
Ckp

Thanks!
halobungie

I think most importantly for any type of hedging strategy (correlation effects included), options can go along way for the investor. Even the simplest option strategies can replicate the desired risk hedging anyone is after.

Dear Dreamliner and fellow traders,
Thanks for this simple yet amazing strategy. I've been demo trading this strategy with very good results for last two months. I've an interesting thought here. If somebody can develop a grid ea which is like any freely available simple grid ea (e.g. makegrid) but generates grid of simultaneous buy-sell and sell-buy orders of highly correlated pair trades with a set profit target. Normally a grid system works very well in ranging or weak market and by selecting a highly correlated pair we'll be simulating the conditions of weak market conditions which can have possibility of very good results. I'm not a programmer but I'm sure with so many very good programmers here in this forum, somebody will come forward. Look forward to hearing from you guys what you think about it.

Hello everyone,

I have worked for 4 months now on statistical arbitrage and simple models exist to take the place from the Diff stock EA or indicator.

For example, a simple trading distance model that I tested on Excel and the results coming from daily charts are really good.

So I am going to modify the EA and indicators and I will be telling if it works or not.

If some people knows about statistical arbitrage, we could build a small group to work on it.

Thanks for all the followers of the topic!

By the way -

People will need to remove the white space between "OrderComm" and "ission()" for this to work, or it won't compile.
Also, "OrderCloseReliable()" function is not defined in the original EA. I don't know how ChuckNZ has defined it since it is a part of his enhanced EA.

In other words, you won't be able to get the patch working until Chuck supplies the function def.

Does anyone know of an indicator that allows one to overlay one currency pair on top of another for the MT-4 platform. Examble eur/usd of fxpro and eur/usd of fxcm pls.or sent tome by email: [email protected]

Any help in this matter is greatly appreciated.

Happy Trading.

Have a look at this indicator or this indicator

Thanks M, different broker with the same currency or commodities not the same boker , i use another meaning

not hedge, pls

very nice ,i love pairs trading

hello guys

today ,i will show my system ,i hope i can find who like pairs trading? and can develope better my pairs trading today

Frist , you must read theory law of one price,pairs trading base it

The theory that the price of a given security, commodity or asset will have the same price when exchange rates are taken into consideration. The law of one price is another way of stating the concept of purchasing power parity.


explains 'Law Of One Price'

The law of one price exists due to arbitrage opportunities. If the price of a security, commodity or asset is different in two different markets, then an arbitrageur will purchase the asset in the cheaper market and sell it where prices are higher.

When the purchasing power parity doesn't hold, arbitrage profits will persist until the price converges across markets.


INDICATOR: ADX(2),%R(2)
CURENCY: ALLL
TIME FRAME: HIGHER D1

http://charts.mql5.com/2/136/eurjpy-...l-services.png

http://charts.mql5.com/2/136/chfjpy-...l-services.png

%R(EJ) minus %R(CJ) (7/26/2013) > %R(EJ) minus %R(CJ) ( 7/25/2013)

http://charts.mql5.com/2/136/eurchf-...l-services.png

DMI - ABOVE DMI +

DMI - increasing, DMI + decreasing

SO:

FROM 7/29/2013 TO 7/30/2013 ,TREND OF EURCHF IS BEAR

I hope i can find who like pairs trading? AND we can disscuss about this