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Simple Correlation Indicator System

  • #181
  • Jun 20, 2016 8:32pm Jun 20, 2016 8:32pm
After very little sleep for the past several days I realise I am unable to continue with the forward-test for now...will take a break and return in a day or so.

If there are any interested people wanting to assist with the forward-testing please step up and let yourself be known! I simply can't test this on all trading sessions; being from Australia I find it hard to catch the larger moves made during the New York session. Any and all help appreciated!

I will answer any questions throughout the day as I see one.
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  • #182
  • Jun 21, 2016 4:20am Jun 21, 2016 4:20am
I think we don't need to overcomplicate this with more and more indicators. I can use it for pure price action trading, for example counter trendline break. Just for confirmation of breakout.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 24 KB
  • #183
  • Jun 21, 2016 5:39am Jun 21, 2016 5:39am
Quoting kirkleaforex
{quote} Hi there and thanks for your interest in this thread! I have attached 3 templates: 1) the long term which shows the H4 Correl8 with the H1 QQE 2) the medium term which shows the H1 Correl8 and the 15M QQE 3) the short term template, which shows the 5M Correl8 and the 5M QQE. Please download all available indicators posted in this thread to ensure you get everything you need to display the charts correctly. I hope you have success! {file} {file} {file}

Thank you for the template. i thought the short term was supposed to use 15M Correl8 and the 5M QQE?
  • #184
  • Jun 21, 2016 7:00am Jun 21, 2016 7:00am
Quoting kiralytommy
I think we don't need to overcomplicate this with more and more indicators. I can use it for pure price action trading, for example counter trendline break. Just for confirmation of breakout. {image}


"Perfection is not when you have nothing more to add, but when you have nothing more to take away." - Antoine De Saint Exupery

"It is not about adding on, but taking away. The less technique, the better you are." - Bruce Lee
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #185
  • Jun 21, 2016 7:41am Jun 21, 2016 7:41am
Quoting kiralytommy
I think we don't need to overcomplicate this with more and more indicators. I can use it for pure price action trading, for example counter trendline break. Just for confirmation of breakout. {image}
Definitely. I have been known for overcomplicating things in the past, and even with this strategy some people will find it still a bit busy...you are right of course; pure price action backed up by the Correl8 indicator picking up changes in strength in the pairs is a great method.

I still have much to learn, so in the meantime I need additional confirmation. I am finding that confirmation in the QQE currently. I hope one day to be able to trade completely naked (figuratively speaking, of course...)
Trade to Live - Don't Live to Trade
  • #186
  • Jun 21, 2016 7:44am Jun 21, 2016 7:44am
Quoting aelimian
{quote} Thank you for the template. i thought the short term was supposed to use 15M Correl8 and the 5M QQE?
Hi there...according to my strategy for the short term, the initial set-up comes from the H1 Correl8 with the 15M QQE, but it is a combination of the 5M Correl8 and the 5M QQE that gives the alert to enter the trade.

If you feel there has been an error in the .pdf or if anything has not been made clear, please let me know where and I will attend to it.
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  • #187
  • Jun 21, 2016 7:51am Jun 21, 2016 7:51am
Quoting TooSlow
{quote} "Perfection is not when you have nothing more to add, but when you have nothing more to take away." - Antoine De Saint Exupery "It is not about adding on, but taking away. The less technique, the better you are." - Bruce Lee
Nice quotes.

I am reading Mark Douglas at the moment and trying to get my psychology more in check...these quotes are useful and have come at a good time.

It is ironic that the more I try to make things appear clear to myself in terms of signals and alerts, the more things can become clouded. I just hope the system I have devised hasn't been a total waste in this regard, and is still considered useful to those who are still experimenting.
Trade to Live - Don't Live to Trade
  • #188
  • Jun 21, 2016 8:20am Jun 21, 2016 8:20am
​I have to say that this is shaping up as one of the most interesting looking methods in a while. I have long been a fan of correlation methods and to find one which has such simplicity about it is refreshing. What I find especially interesting, as someone who generally trades the higher time-frames, is that it seems to be that rare beast - a method which gives clean-and-clear re-entry points on long-form trades which many traders miss out on as they panic at the thought of losing their hard-earned profits and bail too early and then cannot get back in or get back in at completely the wrong time. I look forward to following your progress and thanks for your efforts!
  • #189
  • Jun 21, 2016 8:22am Jun 21, 2016 8:22am
Quoting kirkleaforex
{quote} Nice quotes. I am reading Mark Douglas at the moment and trying to get my psychology more in check...these quotes are useful and have come at a good time. It is ironic that the more I try to make things appear clear to myself in terms of signals and alerts, the more things can become clouded. I just hope the system I have devised hasn't been a total waste in this regard, and is still considered useful to those who are still experimenting.
Attached Image (click to enlarge)
Click to Enlarge Name: TooSlow.png Size: 47 KB


Uncertainty is the only thing that is certain in the market.

What started as simple entry method, line crossing 0 level or one currency line crossing another, has grown into a monster.
What caused this to happen?
Did the original fail method to produce profits?
Did a rough patch cause you doubt?
Did you trade too many pairs?
There are many more questions but those should suffice.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #190
  • Jun 21, 2016 8:44am Jun 21, 2016 8:44am
Attached Image (click to enlarge)
Click to Enlarge Name: tooslow1.png Size: 48 KB


JPY > EUR
JPY XA (crossed above) 0
EURJPY price dropped.

No reason to complicate matters.
No reason to add more indicators.

Enter the trade when setup appears.
Set your stop.
Move stop when appropriate to protect profit.
The market will do what it always does.
Price will go up.
Price will do down.
Price will continue to do that.
That is the essence of trading.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #191
  • Jun 21, 2016 9:14am Jun 21, 2016 9:14am
Attached Image (click to enlarge)
Click to Enlarge Name: tooslow1.png Size: 57 KB


JPY XB (crossed below) 0
Buy EURJPY.
Set stop.
The market will do the rest.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #192
  • Jun 21, 2016 9:14am Jun 21, 2016 9:14am
Quoting TooSlow
{image} JPY > EUR JPY XA (crossed above) 0 EURJPY price dropped. No reason to complicate matters. No reason to add more indicators. Enter the trade when setup appears. Set your stop. Move stop when appropriate to protect profit. The market will do what it always does. Price will go up. Price will do down. Price will continue to do that. That is the essence of trading.
Is the 15 Corel indicator (with data displayed the way it is displayed in your chart) available in the forum somewhere?

Thank you
  • #193
  • Jun 21, 2016 9:24am Jun 21, 2016 9:24am
Attached Image (click to enlarge)
Click to Enlarge Name: tooslow1.png Size: 58 KB


JPY XA 0.
EURJPY long exit time.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #194
  • Jun 21, 2016 9:35am Jun 21, 2016 9:35am
Attached Image (click to enlarge)
Click to Enlarge Name: tooslow1.png Size: 53 KB


JPY XB EUR.
Long EURJPY.

Notice bar[1] retraced to 50% level of bar[2].
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #195
  • Jun 21, 2016 9:36am Jun 21, 2016 9:36am
Quoting MidnightRun
{quote} Is the 15 Corel indicator (with data displayed the way it is displayed in your chart) available in the forum somewhere? Thank you
No.
It is not.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #196
  • Jun 21, 2016 9:49am Jun 21, 2016 9:49am
Attached Image (click to enlarge)
Click to Enlarge Name: TooSlow2.png Size: 53 KB


JPY XA EUR
Exit long EURJPY.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #197
  • Jun 21, 2016 12:46pm Jun 21, 2016 12:46pm
Quoting kirkleaforex
{quote} Definitely. I have been known for overcomplicating things in the past, and even with this strategy some people will find it still a bit busy...you are right of course; pure price action backed up by the Correl8 indicator picking up changes in strength in the pairs is a great method. I still have much to learn, so in the meantime I need additional confirmation. I am finding that confirmation in the QQE currently. I hope one day to be able to trade completely naked (figuratively speaking, of course...)
We all have to learn...

I think this system has a great potential!

The QQE: wouldnt it be better to filter the signals? If the cross of the histo with the line is >=0 its a valid sell signal, and vice versa. If the cross for sell is <0 the momentum often disappears. Histo crossing zero only valid (for re-entry) if the other line is on the other side.
Is there an indicator with alerts for only this conditions?


Thanks for sharing, kirkleaforex !
  • #198
  • Jun 21, 2016 2:16pm Jun 21, 2016 2:16pm
Quoting TooSlow
{quote} {image} Uncertainty is the only thing that is certain in the market. What started as simple entry method, line crossing 0 level or one currency line crossing another, has grown into a monster. What caused this to happen? Did the original fail method to produce profits? Did a rough patch cause you doubt? Did you trade too many pairs? There are many more questions but those should suffice.
Hello TooSlow...yes these are all valid questions for someone who is comfortable with trading price action and leaving the charts as bare as possible. And as much as I see the value in trading this way, I am not there yet.

I feel that the Correl8 only tells part of the story; i.e. a simple cross of the lines is not enough information. There are many instances where the Correl8 will show a reverse cross of the lines but only temporarily. Before long it crosses back again and the trend continues. I need something that indicates the move is still going so I don't exit too early.

The QQE seems a good way of filtering out this interim crossing back and forth; the smoothing ability it offers seems to pick entries and exits which really compliment the Correl8 overall direction and strength.

So, in short:

- the Correl8 gives offers me direction from the cross and also the volatility of the move through showing the angle of the line separation;
- the QQE gives me overbought / oversold, further confirmation of entry and exit and helps me stay in a trade, and;
- multiple time frame analysis offers me both the longer term underlying trend information and the shorter term alerts for entries and exits.

As long as I follow this information and keep my psychology in check, I am very satisfied with the potential of this strategy.

Having said all of that, your screenshots and trade examples are a wonderful example of how simple this can get if a more experienced trader has the skill.

For most of us on this thread however, we are not there yet.
Trade to Live - Don't Live to Trade
  • #199
  • Jun 21, 2016 2:17pm Jun 21, 2016 2:17pm
Quoting lemercenaire
​I have to say that this is shaping up as one of the most interesting looking methods in a while. I have long been a fan of correlation methods and to find one which has such simplicity about it is refreshing. What I find especially interesting, as someone who generally trades the higher time-frames, is that it seems to be that rare beast - a method which gives clean-and-clear re-entry points on long-form trades which many traders miss out on as they panic at the thought of losing their hard-earned profits and bail too early and then cannot...
Thanks lemercenaire for joining us here and for your comments. They are appreciated.
Trade to Live - Don't Live to Trade
  • #200
  • Jun 21, 2016 2:50pm Jun 21, 2016 2:50pm
Quoting illiquid
{quote} We all have to learn... I think this system has a great potential! The QQE: wouldnt it be better to filter the signals? If the cross of the histo with the line is >=0 its a valid sell signal, and vice versa. If the cross for sell is <0 the momentum often disappears. Histo crossing zero only valid (for re-entry) if the other line is on the other side. Is there an indicator with alerts for only this conditions? Thanks for sharing, kirkleaforex !
Hello illiquid and welcome to the thread. Yes there are probably ways of using the QQE as a filter...for now I am happy with how the strategy seems to be offering up opportunities but to be honest more work could be done for sure. I see the strategy as a living thing; the indicators offer a user many variables to test out and if you discover something in the settings that seems to work better for you, then I am all for it.

The QQE is basically a glorified RSI with added histogram functionality and a smoothing factor, therefore a simple cross of the 0 line is normally considered the trade signal. I find that a cross of the 0 line at the same time or very close to a cross on the Correl8 offers a "sweet spot" trade opportunity, however I also see potential in taking a cross of the QQE signal line when it is in oversold / overbought territory, (again, this needs to occur in combination with the Correl8).

As you say, taking a BUY on a cross above 0 or taking a SELL on a cross below 0 is taking more of a risk as the momentum may have disappeared. But this is where multiple time frame analysis can assist...spotting weakness in a lower time frame can help identify signs of exhaustion.

In terms of the alert/s for certain conditions, the QQE already provided here offers user settings allowing a zero line cross AND / OR a signal line cross to be visible.

By now you will have found this thread to be one of an evolving nature, and so I see any efforts made by readers to help clarify these types of things as very welcome.
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