about correlation

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about correlation

Postby vu34476 » Mon Dec 05, 2011 6:40 am


suppose i have two entry signals with two major pais. and i'm working with intraday chats

what is the timeframe that i need to Calculate (how many days?) the current correlation between those pairs, so i'll know if to enter a position in the two of them or just one?

and what cofficient number tells me to trade just one of them?

liron peleg
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Re: about correlation

Postby Apprentice » Tue Dec 06, 2011 3:29 am

Can you describe your trading strategy in more detail.
I'm not sure if I understand you.

correlation coefficients
The two currencies are correlated.
The two currencies are not correlated.
Two currencies have unverznu correlation

Treading Game Plan.
(This is just an example)
For the two currencies that have high correlation.
And at the moment for some reason currently have a negative correlation.
Trader can enter the trade, anticipate return of correlation, in normal conditions.

For me, this is primarily a tool for risk control.

Similar to the strategy I described for Sprade Tradinig indicator.
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Re: about correlation

Postby vu34476 » Tue Dec 06, 2011 4:29 am

suppose i have two entry signals right now..and im swing trading
1- Long USD/CAD
- im working with hourly timeframe.
i checked that the last 10 days the correlation between the pairs was 65 (cofficiant number)

is it good that i checked the correlation for just the last 10 days?
is the number 65 should tell me that i dont need to enter both trades?
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