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Red News Hedge Trading + EA

  • #201
  • Nov 30, 2015 12:59pm Nov 30, 2015 12:59pm
great idea this one, i was actually about to get started. On something similar. Some of my thoughts to help or add , as have spent a fair bit of time analysing this as a system. To fully automate would be an idea. Ie the start of he week, you review the major releases , only preset the entries for the big releases. , smaller news is pointless in the long run.


Im not sure if anyone has discovered good raw data on historical and average pip move and time for each release. I found a programme called news trader pro but they are dodgy. Never sent me a license so don't subscribe. But if anyone knows of a source of solid historic data , would be very grateful . As I think this is key.

Eg this would allow you to get more accurate with stop losses and targets.
I also think that you should have three potential entry types:
1. One directional trade , entered one minute before news release, with target and stop , and trailing ? This is for when it is quite obvious which way the release is going to go.

2. Hedge , same as above opened just before , release.
  • #202
  • Nov 30, 2015 1:04pm Nov 30, 2015 1:04pm
sorry my iPhone is hard work , contd......
3. Is a straddle this is riskier as its when slippage can be bad but still a good position in that your orders are preset , and not always both positions will be opened, a safer hedge so to speak .

Some other things: by finding a source of good historic news data , you can actually find the optimum pairs to trade for release , and the optimum targets and safest stop losses.
And has anyone's tried using fixed spread accounts that stay unchanged for news this maybe a way to avoid slippage etc ?
Thanks
  • #203
  • Nov 30, 2015 4:27pm Nov 30, 2015 4:27pm
Quoting MathTrader7
{quote} You are doing your homework very well! P.S. You can set the EA to automatically open positions at the time you are asleep.
Thanks. Yes I do use the timer, but I need to see which way things are going, say within half an hour prior. These judgment calls aren't easy, they aren't setups that jump out and hit you in the face!
  • #204
  • Dec 1, 2015 10:12am Dec 1, 2015 10:12am
UAH! Good start of the week without negative correlation that i lose them.
Attached Image (click to enlarge)
Click to Enlarge Name: TEST.png Size: 219 KB
  • #205
  • Dec 2, 2015 11:16am Dec 2, 2015 11:16am
oh, have a bad day. I see now that my trades are under a lot of pips but I do not understand: in theory, 80% were positive correlated, now they are at 73%. Probably if I will have to go below the 70% 'close everything in loss

EDIT : the cross are CHFJPY vs GBPUSD ( i entered in sell/buy)
  • #206
  • Dec 2, 2015 11:24am Dec 2, 2015 11:24am
The EA doenst work on my Broker(ActivTrade).

Someone knows what?
  • #207
  • Dec 2, 2015 1:41pm Dec 2, 2015 1:41pm
Quoting LvCa
oh, have a bad day. I see now that my trades are under a lot of pips but I do not understand: in theory, 80% were positive correlated, now they are at 73%. Probably if I will have to go below the 70% 'close everything in loss EDIT : the cross are CHFJPY vs GBPUSD ( i entered in sell/buy)
Hi LvCa,

I just wanted to mentioned that I personally never trade two currency pairs with no common currency between them. If I were to trade CHFJPY with another pair, it would be AUDCHF (CHF is the common currency here).
Trading is the hardest way to make easy money...
  • #208
  • Dec 3, 2015 4:01am Dec 3, 2015 4:01am
Quoting MathTrader7
{quote} Hi LvCa, I just wanted to mentioned that I personally never trade two currency pairs with no common currency between them. If I were to trade CHFJPY with another pair, it would be AUDCHF (CHF is the common currency here).
Hello MathTrader7 , it is very intresting ... what do you mentioned i used for the news time but now i will try to trade only piar with common currency .
Thanks
PS : my last test is stopped by a big DD (too mutch risk for me with out filter :-( )
  • #209
  • Dec 3, 2015 9:03am Dec 3, 2015 9:03am
Quoting LvCa
{quote} Hello MathTrader7 , it is very intresting ... what do you mentioned i used for the news time but now i will try to trade only piar with common currency . Thanks PS : my last test is stopped by a big DD (too mutch risk for me with out filter :-( )
You're welcome! :-)
Just another tip: Try to compare the strength of non-common currencies (AUD with respect to JPY, in our example, CHFJPY, AUDCHF) to decide going Long/Short.

Good luck!
Math
Trading is the hardest way to make easy money...
  • #210
  • Dec 3, 2015 10:39am Dec 3, 2015 10:39am
Quoting MathTrader7
{quote} You're welcome! :-) Just another tip: Try to compare the strength of non-common currencies (AUD with respect to JPY, in our example, CHFJPY, AUDCHF) to decide going Long/Short. Good luck! Math
So i' am no sure to have understood well so i do an example becouse this tip could change my system (absolutly )
Before i traded AUDCHF vs AUDUSD (buy/sell ) with ''common pairs filter'' but without the power filter .. so i could add this power filter :

Attached Image (click to enlarge)
Click to Enlarge Name: TEST.png Size: 183 KB


In the Graph 1 i see that AUDUSD has temporarily follen out with AUDCHF so i will enter only in long AUDCHF and sell AUDUSD : this could be my frist filter BUT.......
in the graph 2 i see that CHF have more power than USD so this is not the best time to trade them : probably the two couples could go back to kissing when CHF have LESS power than USD (no now)

massimum regard
  • #211
  • Edited 5:35pm Dec 3, 2015 4:13pm | Edited 5:35pm
Quoting LvCa
{quote} So i' am no sure to have understood well so i do an example becouse this tip could change my system (absolutly ) Before i traded AUDCHF vs AUDUSD (buy/sell ) with ''common pairs filter'' but without the power filter .. so i could add this power filter : {image} In the Graph 1 i see that AUDUSD has temporarily follen out with AUDCHF so i will enter only in long AUDCHF and sell AUDUSD : this could be my frist filter BUT....... in the graph 2 i see that CHF have more power than USD so this is not the best time to trade them : probably...
The chart you have attached is a very good example for the explanation.

My personal strategy: Wait for the currency strength meter indicator to show a cross, then there would be a high probability [1] that at least one of the currencies (USD or CHF, in this example) to continue in the direction of the cross. In the cross you highlighted in blue, I would go for selling AUDCHF and buying AUDUSD.
Note: Always check the correlation between two pairs on H1 (base time frame) and make sure that their absolute correlation over 200 last bars is more than 0.5 (50%).

[1] keep in mind that no prediction can be made for sure in Forex market!

P.S. Could you please share the currency strength meter indicator?
Trading is the hardest way to make easy money...
  • #212
  • Dec 3, 2015 5:16pm Dec 3, 2015 5:16pm
Quoting MathTrader7
{quote} The chart you have attached is a very good example for the explanation. My personal strategy: Wait for the currency strength meter indicator to show a cross, then there would be a high probability [1] that at least one of the currencies (USD or CHF, in this example) continue in the direction of the cross. In the cross you highlighted in blue, I would go for selling AUDCHF and buying AUDUSD. Note: Always check the correlation between two pairs on H1 (base time frame) and make sure that their absolute correlation over 200 last bars...
Sure , in the setting you can see only the pairs in the grapic or you can select the pair what you want to see .
(i use ''showPairOnChartOnly'' = True ; tf = 0 so the tf is the tf of the chart)
Thank you for you suggestion
Attached File(s)
File Type: ex4 Nihilist_CSM_mtf_V2.ex4   30 KB | 388 downloads
  • #213
  • Dec 3, 2015 5:20pm Dec 3, 2015 5:20pm
Quoting LvCa
{quote} Sure , in the setting you can see only the pairs in the grapic or you can select the pair what you want to see . Thank you for you suggestion {file}
You're welcome! And thanks for the indicator :-)

P.S. For those who are wondering why Nihilist_CSM_mtf_V2.ex4 doesn't work, it simply needs the attached indicator, myRSIOMA.ex4, to work properly.
Attached File(s)
File Type: ex4 myRSIOMA.ex4   4 KB | 466 downloads
Trading is the hardest way to make easy money...
  • #214
  • Dec 3, 2015 5:32pm Dec 3, 2015 5:32pm
Quoting LvCa
{quote} Sure , in the setting you can see only the pairs in the grapic or you can select the pair what you want to see . (i use ''showPairOnChartOnly'' = True ; tf = 0 so the tf is the tf of the chart) Thank you for you suggestion {file}
I may start implementing an EA to automatically trade based on this currency strength meter indicator and my strategy.
Trading is the hardest way to make easy money...
  • #215
  • Dec 3, 2015 6:04pm Dec 3, 2015 6:04pm
Hi Mathtrader, ytd there were news for the FOMC member speech at 6:10PM. Expecting the USD to be hawkish than expected, I had alrdy set the EA according to my broker time to execute right on time at 6:10PM:

1) BUY/BUY for USDCHF and EURJPY (both are negatively correlated)

2) SELL/SELL for EURUSD and USDJPY (both negatively correlated)

Am I doing right for the above? Also, the EA does not execute out the actions.. where have I done wrong? Pardon my ignorance.. thanks!
  • #216
  • Dec 3, 2015 6:44pm Dec 3, 2015 6:44pm
Quoting LvCa
{quote} Sure , in the setting you can see only the pairs in the grapic or you can select the pair what you want to see . (i use ''showPairOnChartOnly'' = True ; tf = 0 so the tf is the tf of the chart) Thank you for you suggestion {file}
Hi, LvCa
Just curious... There are so many CSMs available. Do you find any edge over others in Nihilist's CSM?
See also: http://www.forexfactory.com/showthre...87#post8599587

Thanks,
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #217
  • Dec 3, 2015 7:53pm Dec 3, 2015 7:53pm
Good source to find which news is worth trading:
http://www.forexpeacearmy.com/commun...ng-signals.19/
You can subscribe it to receive daily email notification.
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #218
  • Dec 3, 2015 7:55pm Dec 3, 2015 7:55pm
CSM of my choice:
http://fxtrade.oanda.com/analysis/currency-heatmap
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #219
  • Dec 4, 2015 2:33am Dec 4, 2015 2:33am
Quoting heispark
{quote} Hi, LvCa Just curious... There are so many CSMs available. Do you find any edge over others in Nihilist's CSM? See also: http://www.forexfactory.com/showthre...87#post8599587 Thanks,
Hello Heispark ,
Yesterday i attach the Nihilist'CSM in my chart becouse was the first csm that i found in my platform , and that is ''no digital''( have the line with his cross )... so i must try it to tell you if i will have any edge .
Thank you for the link
  • #220
  • Dec 4, 2015 4:19am Dec 4, 2015 4:19am
Quoting Kilian19
{quote} But you still need to know it to get an edge. The problem with this type of trading is that you are still entering a directional bet! This can be best compared with pairs trading in which you usually bet on the mean return of 2 financial instruments. You basically trade how 2 symbols behave relatively to each other, by hedging you still take a bet on which pair will move stronger than the other based on the outcome of the news. What you are doing is hedge maybe 80% of the movement of the news but your 50% chance of success of being on the...
You are right.
And it no needs to make difficult: hedging two currency pairs with a commun currency in them, is the same as to trade only one pair.
For example: long EURUSD and short GBPUSD = long EURGBP.
But this doesn't mean that correlation hedge can't work.
Just no need to make it complicated.
I use this strategy not just before news, but always, independently from every news or not news, just using simply the OverLayChart indicator, and apply grid if it is necessary (most of the time is necessary.)
If somebody become ill from using grid, DON'T USE IT!
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