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Keep it simple - Correlation Trading System 11 replies

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Simple Correlation Indicator System

Quoting illiquid
@redwed Yes, the GBP correls are the same... the values on the scale prove it. The higher the values, the stronger the respective currency. The higher the distance between the lines, the more trending should appear. Not sure what other question comes in? I would be interested in how the correls are calculated.
yes. the values on the scale prove it. That is the 'key'word im watching for.

Attached Image (click to enlarge)
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Above picture show a few things:

GBP weak and its lowest is -38. Euro is 43. While AUD at the same time reached 66 (also lowest extreme -66).

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And the second one is when we attach AUD altogether with EUR and GBP.
More questions.

 

  1. Who is the most volatile for the time being?
  2. Which pair among the eurgbp, gbpaud, euraud is the most 'valuable' to trade? And why?

The most volatile in this example was AUD. There were the highest and lowest values.

For selection of the pair I trade I use a higher timeframe and look for divergent lines, or crosses of lines. I don't look for the pairs with the most different values, because it maybe the move is over. For me it is more important that one line goes north, the other south, the steeper, the better. I imagine this battle with driving a car. The line goes up --> the currency accelerates, the steeper the line, the more power. If it goes down it brakes. Near the 0-line there is no power.
If you look at a chart with all correls you see often that one currency follows the other or all go one side except USD. I like this currency-meter! If I'm in a trade it gives confidence to stay in the trade as long the stacking of the lines is ok, even they loose difference.
Quoting illiquid
The most volatile in this example was AUD. There were the highest and lowest values. For selection of the pair I trade I use a higher timeframe and look for divergent lines, or crosses of lines. I don't look for the pairs with the most different values, because it maybe the move is over. For me it is more important that one line goes north, the other south, the steeper, the better. I imagine this battle with driving a car. The line goes up --> the currency accelerates, the steeper the line, the more power. If it goes down it brakes. Near the 0-line...
Good explanation.

Here's my version.

Attached Image (click to enlarge)
Click to Enlarge Name: eur gbp aud.png Size: 30 KB


I put 3 lines labelled 1, 2, 3.

1 is when GBP hitting down hard and AUD remain at the top. Sell GBPAUD is very likely. Second option is Buy EURGBP.

2 Trade number 1 closed and we're looking to Buy EURAUD. GBPAUD will be second choice. Buying EURAUD is my decision while EUR in the upper side compared to GBP.

3 Second trade closed and no trade for the rest of the day, not much volatility.

And here's the verdict.

Attached Image (click to enlarge)
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Sell GBPAUD - 48 pips

Attached Image (click to enlarge)
Click to Enlarge Name: trade 1 eurgbp.png Size: 47 KB

Buy EURGBP - 38 pips

Attached Image (click to enlarge)
Click to Enlarge Name: trade 2 euraud.png Size: 52 KB

Buy EURAUD - 4 pips - I admit the exit was a bit late, since Correl shows 'contraction' earlier than point number 3.

Attached Image (click to enlarge)
Click to Enlarge Name: trade 2 gbpaud.png Size: 52 KB

Buy GBPAUD will caught us in whipsaw market.

Beside all these trades, we can take many trades based on other currencies movement. For me, it is paradise for scalpers like me.

One can really do some high speed scalping with this indicator.
Quoting redwed
{quote} Good explanation. Here's my version. {image} I put 3 lines labelled 1, 2, 3. 1 is when GBP hitting down hard and AUD remain at the top. Sell GBPAUD is very likely. Second option is Buy EURGBP. 2 Trade number 1 closed and we're looking to Buy EURAUD. GBPAUD will be second choice. Buying EURAUD is my decision while EUR in the upper side compared to GBP. 3 Second trade closed and no trade for the rest of the day, not much volatility. And here's the verdict. {image} Sell GBPAUD - 48 pips {image} Buy EURGBP - 38 pips {image} Buy EURAUD - 4 pips...
I'm impressed about your in-deep knowledge of currency strength-meter.
Have you ever analyzed daily charts?

cheers.
Merka
Quoting redwed
{quote} That is Correl mtf. Look carefully at upper left. I'm mtf h1 into m15. That's why the shape is 'funny'.
Thank you. Where can I find this indicator?
Quoting Strom
{quote} Thank you. Where can I find this indicator?
Read #295
Quoting Merka
{quote} I'm impressed about your in-deep knowledge of currency strength-meter. Have you ever analyzed daily charts? cheers. Merka
I appreciate your compliments.

I believed most currency strength meter (CSM) was not built for higher tf, especially daily and above. Default settings in most CSM is focusing for scalping on lower tf.

However you can change the parameter according to your own preferences. You can read my posts and you'll know why i'm onto this Correl indicator.

Attached Image (click to enlarge)
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Attached Image (click to enlarge)
Click to Enlarge Name: eur gbp aud.png Size: 47 KB


The main element of trading multipairs: know your 28 pairs. And make sure your br0kers offer them. Get fluent, which one is the base, which one is the quote. If AUD get stronger, you need to buy AUDUSD, but sell GBPAUD. If JPY getting weaker, we will sell JPY, but we will buy EURJPY, GBPJPY, and AUDJPY.
Quoting redwed
{quote} Read #295
Thank you for your help!
Hi everybody. A added Correl MTF and it's show nothing. Have you got any ideas? Thank a lot!
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Quoting Strom
Hi everybody. A added Correl MTF and it's show nothing. Have you got any ideas? Thank a lot! {image}
Hi Strom yes the indo can be a little buggy. Try the following:

1) Change TF to anything else and change back again...if this doesn't work then;

2) Try zooming right out as far as you can so the chart candles are at their smallest, then right click and select "Indicators", then double-click on the correl8 that you have added (M5 Correl8 at the bottom), and then just click ok. It should then appear on your chart and you can zoom back in to what candle size you prefer.

This has worked for me in the past - I hope it fixes your situation.

Rest assured the latest version I am about to release has fixed this issue. I will endeavour to have this out to people soon so you no longer have these issues.
Quoting Strom
Hi everybody. A added Correl MTF and it's show nothing. Have you got any ideas? Thank a lot! {image}
If you are using a broker that has a suffix to the ending of your Currency, then it wont work. I have modified the MTF version and added an input so you can add your suffix and it will work.

For example,
Attached Image



Download:
Attached File
File Type: mq4 correl8_1_SUFFIX.mq4   17 KB | 505 downloads
Quoting xfactornos
{quote} If you are using a broker that has a suffix to the ending of your Currency, then it wont work. I have modified the MTF version and added an input so you can add your suffix and it will work. For example, {image} Download: {file}
Thank you very much .
take care
A quick post to say thanks to members of this thread that are consistently offering others your support and sharing your ideas. I really appreciate your time and effort in answering people's questions, which is particularly helpful to me when my own answers fall short or when i simply don't have much time, like right now. Please keep up the great work guys!
Quoting xfactornos
{quote} If you are using a broker that has a suffix to the ending of your Currency, then it wont work. I have modified the MTF version and added an input so you can add your suffix and it will work. For example, {image} Download: {file}
Still don't work... Look at it.
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Quoting Strom
{quote} Still don't work... Look at it. {image}
 
Maybe you don't have all eu m15 history? Try refreshing your chart (change tf a few times).
Quoting Strom
{quote} Still don't work... Look at it. {image}
Strom,

Your pair is EURUSD with no SUFFIX, you don't need my version, and if you want to use it, remove the "i" from the suffix input.

Like redwed said, try more data or something. Also, after fixing your suffix issue, change timeframes and it should work. Like go to 5 min, then back to 1 min, and it should show up.

See my screenshot below.
Attached Image (click to enlarge)
Click to Enlarge Name: 2016-08-27_20-53-45.jpg Size: 194 KB
Quoting Strom
Hi everybody. A added Correl MTF and it's show nothing. Have you got any ideas? Thank a lot! {image}
Refer to Post 137. That will most probably solve your problem
Quoting xfactornos
{quote} If you are using a broker that has a suffix to the ending of your Currency, then it wont work. I have modified the MTF version and added an input so you can add your suffix and it will work. For example, {image} Download: {file}
Thanks xfactor for your modified indicator. I just wanted to know if there is way to increase the look back period to any number of days we may want. Thanks again.
Quoting xfactornos
{quote} Strom, Your pair is EURUSD with no SUFFIX, you don't need my version, and if you want to use it, remove the "i" from the suffix input. Like redwed said, try more data or something. Also, after fixing your suffix issue, change timeframes and it should work. Like go to 5 min, then back to 1 min, and it should show up. See my screenshot below. {image}
OK, I'll try.. Thx
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