Hi i am new to this platform i have a 9to 5 job have been trading forex for a while i would like your help in evaluating my correlation plan and making it better
The plan has no indicators ( some parts of the plan are entirely mathematical)
I open all the majors chart on pc
open 1 hour timeframe on all 7 charts
I trade once after every 6 hours target 15pips, stop loss -60, lot size 1/150 , i change lot size once every week
I have a very small account , large leverage1:500
The plan: i go to gbpusd first and perform the following calculation for the 6× 1hr previous candles each candle has a positive and negative pip displacement
In a table i go and obtain simillar pip displacements for xxxusd write them down
As they are since they are positively correlated to gbpusd.I then go and obtain +&- displacements for usdxxx majors when noting them down i carefully viceverse displacements since these show negative correlation. I do this hideous long calculation for all the seven majors then i carefully look for instances in values whereby a currency pair made larger +/- pip displacement but not both for all 6 hours i deduce differences in values noting if a pair made a larger + displacement than gbpusd the difference is + and if a pair made a lower displacement that gbpusd the difference is - then i sum up all the differences and trade in the overall direction where+ is for buy and if sumation is negative i sell.All trades have to be closed by friday dayend. If trade target is not achieved i hold position .I only enter new trade at old trade having exited.so far i have only tested this plan on gbpusd only.I would like any suggestions you can give to improve this plan to make it more reliable and is it possible or is there anyone who can convert all this into an ea thanks for reading.
Hi and welcome,
Your English language is very good at describing your actions from which you ask someone to develop and EA, but I am not sure whether there is sufficient information there from which anyone can create an EA. Let’s just take the first part, and maybe with a bit of work, the requirements can be thrashed out to a level of detail from which such an EA could be built.
I address here only the first part - the GBPUSD part.
i go to gbpusd first and perform the following calculation for the 6× 1hr previous candles each candle has a positive and negative pip displacement
Fact - each candle represents a specific period in time. Please confirm you use only the one hour candles.
Fact - each candle is represented by a Open, High, Low, Close value. Can you describe what you mean by "for each of the last six candles, I write down “aaaaaaaaaaa” - a sentence that describes the positive and negative pip displacement from a given baseline. Is the baseline the open, the high, the low, the close of the same candle, or the close of the previous candle, open of the session, close of last week?
A picture, even drawn by hand, may help to explain your use of “the positive and negative pip displacement from a given baseline”
Ok thanks all calculations i do on this plan are extracted from a 1hour timeframe.So for each and every 1hr candle comes with two displacements relative to the point of origin or start price.
For positive pip displacement i will always use highest price point reached- opening price
For negative pip displacement i will use
Opening price - lowest price reached
Now i have to do a table lets assume its monday at 0000 and i want to place my trade, i will have to go to the previous week or friday last six candles from 1800 to 2300 first for gbpusd and draw a table in that table i will extract pip displacement values of each and every hour so i do for 1800,1900,2000,2100,2200,2300for each and every candle i get two pip values that show extent of movement of a currency pair in a space of 1 hour.Values are denoted by(H-O;O-L)
I then move on to the remaining six major pairs open the same 1 hr time frame and extract the same type of infomation from 1800 to 2300 now i am careful enough to fill as the info comes for eurusd, audusd,cadusd because these pairs show positive correlation with gbpusd.The remaining three majors however show negative correlation hence for me to do an effective comparison of price changes i have to vice verse values obtained to(O-L;H-O)now i then compare all generated currency pair data to gbpusd each and every hour for six hours all i will be looking for are instances when a pair made a larger positive/ negative pip displacement but not both
At the end of all comparisons i need to know how big are the differences in pips hence i assign all positive displacement values positive and negative displacements negative.At the end of calculation all i simply do is add all positive values to the negatives and get an overall direction to trade in.
Unfortunately i am unable to share materials that show the plan in extreme detail on this platform as i am new but if there is something you still need clarification on i would be glad to try to express in words as much as possible thanks.
Hi,
Thank you for quick response to my questions. Before looking at an EA I wonder if this is a simple task that can be automated in an Excel spreadsheet using the OHLC data sets imported. Are you familiar with use of Excel with OHLC data?
This is the sort of analysis I am referring to. I didn’t watch the entire webinar, but you get the drift?
Sounds interesting. Have you kept any analysis of the trades to date?
Ok let me just check the webinar i will get back to you thanks.
Yes i have but i have been backtesting but since the process is long i thought maybe there was a way to automate the plan hence do quicker backtests
I have to wonder whether there is an alternative approach which would be so much simpler. For example whether prices for the selection of pairs are above or below a given MA. Or whether another MA is above/below the reference MA.
Well the plan does not use any indicators at all, purely candlesticks and a few math operations
I think I grasp the idea, but details are missing. Having illustrated example would be ideal.
This looks like some kind of arbitrage strategy.
For each major pair you take max positive range and max negative range (High-Open and Open-Low) in pips.
Then you somehow (need details) compare these move ranges to what GBPUSD did in the same periods.
Based on differences in moves (need details here) you open trades with 15 TP / 60 SL. (on which pairs and in which direction?)
How do you incorporate the difference in volatility between pairs? EURUSD will move slower than GBPUSD so adding the ranges is not exacly adding apples to apples.
Ok so i learnt about currency correlation and correlation predicts that gbpusd is slightly volatile that all the majors hence whenever a major pairs makes hh/ll than gbpusd it has defied the principle relationship hence there is a need for a correction/ restoration of balance so what i intend to do is to calculate all instances when the other majors defied the way nature of currencies move sum the ideal values to get an overall picture to trade on gbpusd i only intend to trade the correction once every six hours.this plan could also work on other pairs if you understand correlation principle.eurusd does not always move slower than gbpusd otherwise there will be nothing for me to trade if that was the case always
Hi,
I now spent the 1 hr 15 minutes watching the video in full. It has helped me somewhat and encouraged me to seek further detail on use of imported OHLC data streams into Excel. In other pursuits (my job) I am an avid Excel user, having cut me teeth on Lotus 123 before many members here were born.
In my early days when I was still a practicing engineer I wrote some formulae into a spreadsheet that allowed me to reduce a 30,000 line dataset into less than 3,000 lines for an acceptable file size to input into an analytical program that our software gurus said they needed five months lead time to achieve. I did it in one weekend having “borrowed” and IBM PC desktop from the office for the job.
So now over 30 years later, I am encouraged to get back to basics and see what damage I can do with the same approach to testing out some ideas before contemplating “writing any scripts” in any modern big, bad EA tool.
For me it is simply the chicken and the egg syndrome. If you can express what it is you want to achieve in a series of increasingly detailed steps from concept to production, you will not need anyone else to help you. As soon as you involve another party to do a “black box function” that you yourself do not understand, even if you have clear inputs and outputs, you leave yourself open to compromise. I hate black boxes with a passion. They normally hide scenarios that have not been tested, thought through or planned for. And that is why EAs have a poor market reputation for non-performance. Gosh if it were that easy, we would all be millionaires, Rodney. 