Inverse Pairs
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 10, 2012 at 10:55
https://www.forexticket.co.uk/en/tools/01-01-correlation
eurusd and usdchf have a correlation of about -80%, so one goes up, other goes down.
eurusd and usdchf have a correlation of about -80%, so one goes up, other goes down.
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 10, 2012 at 11:37
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 10, 2012 at 11:40
(editado Apr 10, 2012 at 11:41)
But for this kind of trading you got to know your shit. Betting x cents a pip just doesn't cut it. Got to be able to work out position values and basically a whole pile of things that Metatrader just doesn't even begin to cover.
Oanda reports a bit more but in the end you'll need to be able to do the math via spreedsheets mostly as this information just isn't available freely.
Oanda reports a bit more but in the end you'll need to be able to do the math via spreedsheets mostly as this information just isn't available freely.
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 10, 2012 at 11:45
The amateur way of doing it is to overlay two data series on a chart - lets say eurusd and gbpusd, as they move further apart bet they will towards each other. Simple as that.
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 10, 2012 at 11:51
(editado Apr 10, 2012 at 11:54)
What is brilliant about this is that it moves you beyond indicators, which is where 99% of traders get stuck. I haven't bothered with indicators for years. Load of crock.
Bending your mind around this lot will get you into the right concepts to make fx work for you. You'll notice after a while that you don't even bother with indicators and you'll probably do better than ever. See it starts becoming about position sizing. When to own more, when to own less and so on...and that is key to fx.
Bending your mind around this lot will get you into the right concepts to make fx work for you. You'll notice after a while that you don't even bother with indicators and you'll probably do better than ever. See it starts becoming about position sizing. When to own more, when to own less and so on...and that is key to fx.
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 10, 2012 at 11:58
And the math is freely available: https://en.wikipedia.org/wiki/Correlation_and_dependence
Apr 10, 2012 at 21:37
TheCyclist posted:
What is brilliant about this is that it moves you beyond indicators, which is where 99% of traders get stuck. I haven't bothered with indicators for years. Load of crock.
Bending your mind around this lot will get you into the right concepts to make fx work for you. You'll notice after a while that you don't even bother with indicators and you'll probably do better than ever. See it starts becoming about position sizing. When to own more, when to own less and so on...and that is key to fx.
Agreed, Its not really brilliant its called trading. It's nothing more than portfolio management and once you get it you really don't even need to look at a chart let alone any indicators. Consider it old school tape reading and portfolio management.
I just trade.
Apr 11, 2012 at 06:22
I am really looking forward to getting into this. It seems that everything that I do is wrong, just kidding. I do enough wrong to make myself think that way. Seems that if I traded the inverse of what I think I would be a real trader.
With the above being said, I would like to learn this mentality. I had the idea of inverse pairs about five years ago a could not get anywhere with it. I traded other ways and lost enough that I dropped out of trading.
I would like to ask this. As I dig deeper into this train of thought and I get ready to place a few trades----would it be OK if I posted my thought process in this thread. I will do this ahead of time maybe a day and get input on the trades----guidance if you want to call it that. Maybe you guys could tell me if I am going about this in the wrong thought pattern before I place the trade.
This thread has been so helpful. Thanks for sharing your knowledge.
Another question, Do you trade with EAs.
Thanks Dale
With the above being said, I would like to learn this mentality. I had the idea of inverse pairs about five years ago a could not get anywhere with it. I traded other ways and lost enough that I dropped out of trading.
I would like to ask this. As I dig deeper into this train of thought and I get ready to place a few trades----would it be OK if I posted my thought process in this thread. I will do this ahead of time maybe a day and get input on the trades----guidance if you want to call it that. Maybe you guys could tell me if I am going about this in the wrong thought pattern before I place the trade.
This thread has been so helpful. Thanks for sharing your knowledge.
Another question, Do you trade with EAs.
Thanks Dale
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 11, 2012 at 06:34
(editado Apr 11, 2012 at 06:35)
I use EA's but I prefer using a JAVA API. Lot quicker.
If you have questions ask, if I can answer it I will, don't mind helping out a bit.
If you have questions ask, if I can answer it I will, don't mind helping out a bit.
forex_trader_73122
Miembro desde Apr 11, 2012
posts 28
Apr 11, 2012 at 20:48
Hill posted:
Could anyone tell me if there are inverse pairs. Say one pair goes up the other goes down. Is there a list somewhere on the correlation of pairs? How one pair reacts to other pairs.
Thanks
For how long have you been investing using this approach? I am interested.
Apr 11, 2012 at 23:22
Money management I am looking at .02 per trade which will be less with the proper stops. Any suggestions
Stops are not a part of this technique, therefore lot size should not be more than .1:1
I posted a video called The Midas Formula. Maybe check that out for ideas and think on the part about dynamic hedging.
Also, best to choose pair combinations with net positive carry.
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 12, 2012 at 01:39
(editado Apr 12, 2012 at 01:57)
API : https://fxtrade.oanda.com/trade-forex/api/
EA's I did my own, not for sale or available. Never really looked at other peoples EA's.
This approach is not about time frames. They don't feature. Eur is what it is on 5 min, 3 hour or daily, the current price is the current price on ALL time frames. I wouldn't use any indicator you can just load of the net as well. The math is readily available. Study it, use it. You have no idea what's in that indicator, so it might scupper you before you even start.
This approach is very much not about indicators anyway. It's about current price and relationships.
MM of 0.2 - I have no idea what that means.
What's the current relationship, what is the historical relationship? In terms of that relationship how much do you own and should you own right now?
EA's I did my own, not for sale or available. Never really looked at other peoples EA's.
This approach is not about time frames. They don't feature. Eur is what it is on 5 min, 3 hour or daily, the current price is the current price on ALL time frames. I wouldn't use any indicator you can just load of the net as well. The math is readily available. Study it, use it. You have no idea what's in that indicator, so it might scupper you before you even start.
This approach is very much not about indicators anyway. It's about current price and relationships.
MM of 0.2 - I have no idea what that means.
What's the current relationship, what is the historical relationship? In terms of that relationship how much do you own and should you own right now?
forex_trader_28881
Miembro desde Feb 07, 2011
posts 724
Apr 12, 2012 at 01:43
It's a completely different way of thinking about fx. Think like an investor, not a trader.
The trade is not the end here. It's the tool you use to adjust your position.
The trade is not the end here. It's the tool you use to adjust your position.
