Hedge correlation forex factory

Hedge correlation forex factory

Posted: x-x Date of post: 20.07.2017

My name is Kelton and this is my strategy. It has been know by names such as statistical arbitrage and pairs trading. Basically I find two currencies that are highly correlated.

When one goes up the other follows the same amount roughly. What I do is wait untill something upsets the two currency pairs that makes them fall out of correlation. Then I buy the underperforming currency and short sell the over performing currency at the same time and the same lot size.

Eventually these currencies will go back to their normal path and touch again. I then close both orders and have now profited the distance between the two when I opened the orders.

It is considered a market nuetral position because as I am losing on one order I am roughly making the same amount on the other order. Until they come back to eachother and I profit.

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Every one has been profitable so far. ANYTHING BELOW YOU SHOULD NOT TRADE.

I USE THE 5,15,AND 30 MIN CHARTS. I've seen this traded successfully with stocks, however I'm sceptical it will work with forex. Talon D is right, you are basically just trading a combination of the pairs.

hedge correlation forex factory

I have traded it successfully. I do not use a correlation indicator like I used to because it rescales itself and throws everything off. But you need a pair of currencies that is Not too correlated or you will never beat the spread.

hedge correlation forex factory

A lot of jpy currencies are extremely correlated. Ill upload what my chart looks like in a bit,. I use statarb myself too.

I wonder are you using countegration to determine that the pair is out of sync? And you mention 18 trades you have done, what time frame are you talking about?

I ask because i am still optimizing my system. I do it manually I dont trust automated systems personally. I would then close all positions when the two charts come back together and touch. I use the 1 min time frame which can get about orders in a day and then monitor the charts every once and a while untill they come back in sync.

hedge correlation forex factory

And make sure on the 1 min time frame you are totally zoomed out in mt4. Its taken me a long time to develop this strategy I hope it helps everyone be profitable. The picture below is what I look at. I do not use any other time frame besides 1 min zoomed all the way out. The other ones do not work well. Ok, so i understand that your main asumption is that they will cross or at least touch again.

I am using a different method and trade on relative movements. How long is your average holding period? I trade the daily charts and on average have open position between 1 and seven days. I hope its not to confusing where i entered and exited. Ok I had the same problem for a while now. And does it matter what sessions you trade in? So how do u make one of the mt4's more opaque than the other.

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Can u do it for just 2 or 3 charts or is it applied to the whole of 1 mt4. Hey evad you have to get a program like vitrite to make the windows opaque. Do you do it manually, or have you got an automated system? Fed Hike In December But What's Next? Free Forex Trading Systems.

Forex "Pair Trading" or "Hedging" | Elite Trader

PLEASE LET ME KNOW HOW YOU DO ON THIS STRATEGY IT IS VERY POWERFUL. Can you give more examples of co-related pairs? Hi Kelton, That's interesting. Hey kidninja my average holding period is 30 min to a few hours.

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