Corrman's Correlation Comments

I don't trust the patterns, or I can't trade them effectively. I will try to find a pattern that also combines a known, simple correlation, like commodities and CAD, AUD, bonds and JPY.

Correlations will converge and diverge. If there is a typical correlation, it will be convergent more than divergent.

I look for converging correlation to the typical after diverging, on a short time period, with a pattern.

GL

Oil at support pulling back and CAD currently correlated. I'm waiting for a test of the oil low to short USDCAD after it falls from arund 3250, or 3240 if oil begins to survive the low test.

Shorted USDCAD as oil moved up, but there is no stopping the fall in GPBUSD so that was the dominant correlation that caused my stop out as USDCAD rose on pressure from GU, oil was steady, CAD diverged, it happens.

The error in this trade was my inflexible attitude to repeat what had worked for me before, but in this situation, with the downhill freight train of GBPUSD, I didn't allow for that to be as much or more influential and a more powerful correlation. This loss is in addition to yesterday's loss I mentioned in the USD/CAD thread. It's nice to have lessons, but if you don't implement them, it won't help.

even tho i was totally wrong and missed information I should've found, I did see it while I was in the position and then I tightened up stops and so the loss was minimal, but then I tried the same thing again, 1/3rd the size and of course, lost again, but was still a small loss and I learned a lesson. Monday was worse because I lost 1% and it was from breaking rules and not being aware that they applied and being driven by feeling rather than total mental discipline, a frequent error that I need to overcome and keep my risk super low while working on it, I'm trading a micro account for this purpose.

currently oil highly correlated with usdcad for the pase 1.5 hours
usdcad in uptrending channel on daily and at the top with daily bar overlap
yen pressure along with bond, that's 2 points for a rise in usd so far,
eurusd continues prior down day but near prior lows from June, July
gbpusd nice bounce from 24 hours ago but still downtrending and continues lower
2 more points for rise in usd
however all of these are short term extended from their long term trends so at 9:15 ET I can't be looking for continuation, I expect a pullback and even then, I'll be looking for a complex pullback to correct from these extensions, If I lose on first trade, I'm done for the day. That's today's plan. GL

Psych issue today: I am fixated on what has worked for me recently, it's a bias, so I missed what actually did happen today because of my fear of changing what has recently worked, I need to use related market correlations, and the only one I've used successfully has been oil/CAD but today it was bond/yen but I didn't work on that because I kept looking for the prior and that isn't working today for the same reason as it didn't work yesterday, because the dominant relationship in todays markets has changed.

Lesson for today is to be aware of my fear of changing what has worked and if it is something new, use lowest risk and try the new correlation using the same techniques I've used for other ones, and don't obsess on the one that isn't in play currently.

I am not following my plan, I am addicted to trading and I will continue to lose this way until I either figure out how to change or I continue to bleed my account down to zero. Excuse my drama....

day 4 here and finally got it together for a change. Implemented lesson from this week on going with the markets that are correlating even tho not in my comfort zone of the only set that I was used to trading....

Saw 30-yr bond futures testing good looking leg turnaround and with high volume, stopped trying to find oil/CAD since oil not moving much, so I shorted usdjpy on the correlation of yen with bonds here, got a scalp in on 4 lots one remaining, but about to get stopped on that one for be, stopped at 1.5, glad I took the others for 6.5.

I posted on the usdjpy thread more details on the trade I took. usdjpy moved a lot more than my scalp amount, but this was my first attempt at it, and I have a rule about avoiding less predictable times like news and market opens so I passed when it set up again, it's making a really nice move without me, but you can't get all the moves, however on something setting up this nicely, I may have to reconsider that rule, not sure yet.

Once usdjpy started going, there was no entry for me since I only enter on pullbacks, train left the station, I couldn't get on. Still a good day for me because of my adjustments to my plan, behavior, thought process, execution, emo management, and that's the really important stuff, a small gain, enough for a Snapple is just the statistic backing up the improvement in my process, that's all I can ask for.... c u tomorrow

Scalped eurusd, sm gain. posted it in eurusd thread. Problem is that I'm emo now, so I have to take a break, heat up the tea, miss this market open volatility even tho I may miss, I know I can't think enough since I'm feeling. So I have to step away, manage myself, and maybe look for opportunity a bit later and know and accept that I am missing market action because I know myself and I can't function in this state of mind, so I'm pausing to regroup so that I might be able to re-enter the zone.

oil hugging 50 for half an hour,
end of London,
Friday,
eurusd attacking lows of 1.1000 again and so now it's meaningless as a round number,
usdcad on it's own page but bouncing around,
usdjpy in a range and looks stuck
spoos back to premarket but still ahead the same amount
gold shook both sides and now back to the middle
bonds sideways on high volume,
ok, so what i see is eurusd in a move along w usdcad, which means I have to conclude that there isn't enough correlation for me to trade, bc i need to see more broad market participation so i got nothing here

Friday afternoon strangeness and missed moves is fine, I made enough for a small bottle of water, but at least I'm back on the gain train, bonds selling on volume so usjpy up oil sm pop, but after disconnect with cad, not enough time remaining to take a position so I'll keep the water and quit, c u next week

Sunday night, studied "boxes" Friday day and night and all day today for 12 hours, and traded them, probably wrong, didn't use correlations, lost 13 trades with zero wins. So it's a lost weekend I guess... back to correlations!!

Monday I was feeling ill from over doing it this weekend and putting in 14 hours on Sunday, pushing the limits of my obsession without doing enough for my health, lost since I still traded, but still learned...

Today, Tuesday, I misused my correlations and over-weighed the oil move, which didn't fall within my rules of a converging divergence to trade usdcad, so I totally messed that analysis up and lost on the trade, which was a very easy strong move with pullback long, but I shorted it, yup, ugly chart, but here it is...



and then I got eurusd correct and did align it with oil moves and watched usdcad and usdjpy for no extreme divergences so I was able to hold for some decent scalps here, and it's a nice goal to have achieved a bias direction turn in my analysis and also to have traded that direction reversal, I have rarely been able to accomplish that, so at least I made some kind of progress...

not sure if I'll ever be a good trader.... I have confirmation bias and that really sucks. That's only one of them. Issues issues issues....

one pip for me 2 for the broker... but I sure did nail that exit woo hoo

had to kill it there just before the jpy news

I messed up by trying for the 2,000th time to pick a bottom, use an extreme bar, climactic style, counter trend and lost twice in USDJPY, and posted in that thread. No chart, too embarrassing. But then I entered long UCAD and using something rather new that I keep seeing work out but trusting my ability to correctly implement something new is difficult. I did enter it, I killed my gains since they overcame my prior losses, which is not the plan either, but also, the support area in UCAD was there for a 2nd time and wasn't as likely to move at the end of London session as it did from 7:30 ET and 10am, so I took it as far as was realistically possible, knowing from experience the flow.... Somehow I came out a couple of bucks ahead. I now now a new rule on my index card in my trading plan, so I learned something and hopefully I don't repeat that lesson again, I don't need a failing strategy for hope when I have successful strategies as long as I have patience to wait for them.

lost again and quit for the day after huge mistake. Did some psych research, it turns out I'm delusional. I am illogical so I guess it's good my risk is very small.

I'll try to not be delusional, but that in itself sounds delusional. So I'll take my risk down to 1k lot size until I figure out if I can move towards reality.

cognitive bias means you have a systematic pattern of deviation from norm or rationality in judgment; inferences may be drawn illogically.

so all this time I've been attempting to trade when I was irrational and illogical and biased, ok that makes sense... now I know why I suck at trading.

http://lifehacker.com/this-graphic-e...t-y-1730901381
http://ritholtz.com/2016/09/cognitive-bias-codex/
http://www.businessinsider.com/cogni...cisions-2015-8
i'm not the only one... http://nautil.us/issue/24/error/the-...ith-scientists
https://www.sciencedaily.com/terms/l...ive_biases.htm
common chart in others: http://mentalfloss.com/article/68705...your-decisions

will I quit or just limit my attempts to trade to a tiny 1000 unit lot, once a day and see how it goes? I can't give up now, but I also can't continue the delusion that this will support me any time soon.

I quit for a year. I'm back and I feel totally different.

quick note about my scalp long USDJPY this morning. I thought that maybe my name isn't appropriate any more since I didn't think that I would be basing my trading on correlations as back when I joined. So after a year, today I definitely did use correlation to keep me interested in remaining in the long trade I took at support of USDJPY, but there was a real solid trend up in EURUSD AND GBPUSD, so it did not make sense to be long USDJPY did it? no. But OTOH, those trends were in place for a long time and trends turn to ranges and ranges dominate most of the time. So I boldly suggested to myself that those trends were getting extended and I certainly wasn't going to conclude that they were over, but I think it isn't going too far to suggest that they may be due for a pullback.

Those correlations were the basis for me to seek a support area in USDJPY, which I found at the base of a large head and shoulders that was not following through. So I entered long at that support area and scalped it for a small profit, on too few lots, with a modified target that got me out too soon, but also, I was motivated to test a new broker and new platform and I've never even practiced on it but it was similar to others I've used... ( quick note? do I ever do a quck note? no... ) so anyway I was anxious to see how it worked and I just wanted out while I could eek out a scalp, I don't remember where I was going with this... ok, so I was very intently watching the PB in those 2 inversely correlated pairs and it kept me awake during the scalp and I was lucky enough to get one right. Nice to not have a stop loss on first trade in a year, but there's always next time. (sarcasm) End of quick note. ###