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Correlated pairs method for disciplined traders

  • #41
  • Nov 16, 2014 9:59pm Nov 16, 2014 9:59pm
Quoting GreySkull
{quote} I have to agree this concept (forex correlation concept)., but it will be much better if this where to be traded during the news. session both buy or sell with define stop less & Take profit. But then required strict discipline from the trader...cannot deviated from the rule. Similair to negative correlcation between USD/CHF & EUR/USD@ 90% correlation... during news Take profit 40 pips stop loss ard 25 pips... based on Time frame 1 hours. For these currency EUR/JPY & CAD/JPY what is the time frame used?
you can use any time frame
  • #42
  • Last Post: Nov 17, 2014 8:50am Nov 17, 2014 8:50am
When I trade this kind of trading, I do this:
1. I scan for the pairs combination that have cointegration value by doing ADF test
2. I wait for the combination to have a deviation of regression
3. then execute the trades.
here is the example that I found 5 combinations of 10 pairs. it seems that I just trade sell audnzd....
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