Simple Correlation Indicator System

Hi Kirk,

I don't use the correl 8 as a stand-alone indicator. I rely on candlestick patterns, the 9 ema, PSAR and Ferru FX's currency strength meter to pick my trades. The correl 8 and QQE are superb complements and give me great confidence in pulling the trigger. I trade the 15M time-frame and set my profit target at 10 pips only.

I thank you for your magnanimity in sharing your knowledge.

God bless you.

Range bars, anyone?

Can't wait to see your work, Kirk! Thanks!

Hello,

a small idea (how to use correl8 + qqe for scalping)

5 min chart
Icorrel8 (34, high-low-close)
QQE (Hull MA, SF 34 / RSI 55) - use this for more volatile pair like GU. You can play with the settings for every pair, in fact its better for every pair to have its own setting depending on the rhythm of the pair.

QQE signal (cross) only valid if supported by iCorrel8: The stronger currency must be above +25 line with at least 50 units separating from weakier curr, the more the better (having one curr above 25 and another below -25 is very strong signal). Any signal with iCorrel8 not supporting it (e.g. correl still showing the opposite strength of currencies) is invalid.

Further confirming of signals: 15M QQE signal confluence (using 2 QQE's with different settings, if signals show up on the same candle (or on 2 candles following each other), it further supports the move)
Example of 15M QQE settings: QQE1 (Hull, 21, 55) QQE2 (IE/2, 13,34). You can use the same technique for 5min (so QQE signals confluence together with iCorrel8).

IF QQE signal appears with iCorrel8 not supporting it, wait till iCorrel8 shows proper values (so going above 25 with 50+ separate value).

Obviously all the settings are still being tuned and i believe better values can be found for QQE. For iCorrel8 i find 34 period (5min) to be quite accurate.

This is still work in progress but can give you an idea how to use it. Having a correl8 indi with alarms (separation value, above 25 line) would be great.

You can find valid signals using these settings on majors (not crosses!) every day.

Any updates on this system?

OK people, finally I have a moment to get back in touch with this whole thing and offer you what some of you have been PM'ing me for over the past few weeks.

Please accept my apologies for not being here and providing regular updates...rest assured everything is up and running again and I am excited to be sharing with you not just the re-worked Correl8 indicator, but a great trading strategy which I think you will enjoy using.

So without further ado, let's get into it!

Firstly - the updated Correl8 indicator...I have renamed this the Strength Separation indicator, or SS for short. This reflects the fact that what the indicator actually offers us is an alert based upon the strength of the separation of the two individual currency lines. This value I refer to as the SDV, or Separation Distance Value. People who have been following this thread will know all about this.

The indicator has been updated in several ways:

1) Changes to the SDV can be made in the indicator settings dialogue box...it is called EntryTriggerValue.

2) I have included the Percentage Change in SDV input fireld...a theoretical input value, which admittedly has not impressed me much, but it is there for testing.

Again, if you have been following the thread you will have read about my attempt to code in something to measure the percentage change in SDV from one candle to another. It was my premise that a % change of 40 or greater represented a decent enough upswing in volatility for a signal to be considered "more valid", and I was including this input as a possible trade filter. The reason I included this is I was seeing signals which weren't leading anywhere, and thought this may have been the solution. So, try it out, but as I said a moment ago, I feel it is fairly redundant, and a little "buggy". It is found in the settings dialogue box under EntryMinSDVPercent.

3) I have included various alert functionality, including:

a) on screen arrows - BUY and SELL arrows can be individually set to different colours;
b) screen popup alert;
c) sound alert;
d) Push notifications;
e) Mail alert

Additionally, there is a "Show Arrow" setting, in case you don't want additional "clutter" on your screen.

And there is an ExitTriggerAlert in the settings dialogue box, which again is something I thought at the time was a "bright idea" but in hindsight probably wasn't. As the currency lines converge after an initial separation, the SDV values narrow, and the theory was that if the SDV values narrow to within a certain range, an exit signal would alert me to consider an exit. Yeah, well, as always some things are great in theory, but in reality they don't account for much...try it out though and see if it works for you. I was trying a value of "30".

4) I have had a "MaxBarsBack" feature included, as sometimes the sheer amount of data calculation going on can be CPU intensive. I set this to around 250-300 bars, which seems plenty enough to cover most of the screen (depending on how far in and out you have the screen zoomed). And from what I can tell there are no bugs anymore like there were prior to now.

Everything else is fairly standard.

I have been using an 89 period as the iPRI value. This may sound like a "slow" approach to generating signals, but in reality it is proving a decent value for getting in without it being too early. It seems pretty responsive to volatile price fluctuations, so having it set that high / slow actually works ok.

OK...now for the Strategy!

Time Frame: I am personally trading the 1 minute chart (forever a scalper (t heart I'm afraid!) but this has the potential to be traded on any TF.

I am changing this strategy up again, but this time I feel it is more simple, and I am now using the following indicators:

a) Heiken Ashi Smoothed indicator at a value of 233 (Fib number - I love 'em!)

This is used as a trade direction filter...buy when price is above, sell when price is below;

b) Winner indicator - with an 89 period and with a smoothing average of 5.

This is a recent addition to my toolkit, and is replacing the QQE. I have level lines placed at the mid-level 50, and at 15 and at 85.

If price is above the 233 HA Smoothed, I buy when the Winner histogram bar climbs out of the 0-15 zone, or sell when price breaks down from above the 85-100 zone, and ride it as far as I can, (but more on the exit strategy later).

c) I have another HA Smoothed indicator, this time using a fast period of 3.

I have added alerts to this, namely screen popup, sound and Push notification. If price is above the (233) HA Smoothed, I buy when there is a change in the 3 priod HA Smoothed, and ride it as far as I can.

d) I have the Daily Open indicator showing.

If price is above the Daily Open, I tend to have bullish sentiment, and vice-versa...it all depends on where price is in relation to the 233 HA Smoothed etc.

I also refuse to trade when price is within a 5 pip range of the Daily Open, as price will likely "faff around" this level for a while before making up its' mind.
It is when price is in this 5 pip range that I pay particular attention to the SS alerts!

e) I am introducing the RenkoStreet Channel indicator (available by searching Google...I don't think there is nothing proprietary about it, although there is only the .ex4 available).

I have been using it on Renko charts but its' primary purpose for me is for setting a dynamic Stop Loss. If traders like staring at the screen, then they can move the SL as the Renko Channel moves with price, slowly locking in more and more profit until price reverses and hits the SL at the channel boundary.

I love this indicator, and although I am aware there are others out there similar, I haven't been bothered trying to find one as this one does what I need it to.

I also use it for entry, when price breaks above a recent high or below a recent low. These high / low swing points can be easily recognised by the coloured semafor on the channel boundaries.

f) And of course there is the Strength Separation (SS) indicator we all know and love.

I am not relying on one or another indicator in isolation, but rather ALL together in confluence with each other:

- I need the SS indicator to alert me to volatility and separation of one currency against the other;
- I need price to be above / below the 233 period HA Smoothed for a BUY / SELL...this gives me the bias or sentiment for the trade;
- I need the 3 period HA Smoothed to be signaling a BUY / SELL
- I need the Winner indicator crossing up from below the 15 level line for a BUY, or crossing down from above the 85 line for a SELL. (Occasionally I might take a cross of the 50 level line for either direction, but more on that later);
- and I use the RenkoStreet channel indicator as a potential entry trigger, but mainly as a dynamic Stop Loss.

If ALL of the above signals are in agreement with each other, I pull the trigger, and not before.

Targets.

A matter of personal taste I know. I used to use Pivot Points as an option, and might still do so going forward, but to be honest the indicators I have referred to above will tend to show when price is stalling, and any one of them can be used to determine when to exit a trade. So these days I rely upon targeting an exit signal as my TP level, and not so much an actual pre-defined level. This way it is more dynamic and overall it seems a better option for me personally.

I will post a few screenshots shortly showing entries and exits.

Lastly, and most importantly, the best trading filter out there are the following major dot points:

- do not trade more than 2-3% equity on any one trade
- do not trade at least 15 minutes prior to / following a news event
- as this strategy is based on exploiting a volatile separation of one currency away from another, the best sessions to trade are the sessions that offer the best market volatility, i.e. London / NY etc. So please do your due diligence and test this strategy by being sensible with these above considerations always in mind.

I have included all indicators and template files in a .rar package. These have been saved exactly as I use them, so they are ready to test right out of the gate. But I do recommend testing on a demo, of course, until you are familiar with the strategy. Needless to say I am protective of the source code and so I have only posted the .ex4 files. Please respect my decision to do this. Literally hundreds of hours have gone into the thought behind the programming and I don't want it changed without my consent.

Best of luck to you and have fun. Feel free to post any results you get, but try to keep things positive, in keeping with the vision that I have for this thread. Any negativity will result in a swift ban; there's just no need for it. Basically, when this strategy is used properly, there is no reason you shouldn't be able to pull pips out of the market at will. If you can't then there is something you are not doing right; the strategy itself is sound.

All the best! Screenshots to come...

Welcome back Kirk

It has been a while.
I'll look into your upgraded strategy and I'm sure it will be profitable as before.

Cheers
Merka

Example 1 - screenshot of a potential SELL on USDJPY today.

In the screenshot, price is already below the Daily Open, AND below the 233 period HA Smoothed, therefore I am looking for a sell.

I get a nice signal from the SS indi at the same time as the 3 period HA Smoothed changes to a sell, and the Winner indicator is in the 85-100 (overbought) zone.

I sell at the close of the candle after it breaks below this 85 level line. SL is placed at the recent swing high, as indicated by the Channel indicator red semafor.

In this instance I wait for any exit signal from any of the indicators, and move my SL each time there is a change in the upper channel boundary. I eventually close my position when there is a ZERO-LINE cross by the yellow JPY value line in the SS indicator.

4 pips plus spread would have been the overall risk in hindsight, and about 20 pips in profit overall.

NOTE: I am not going to take the following BUY signal from the Winner indicator, as price is still below the Daily Open and the 233 period HA Smoothed...only SELLS allowed...

Example 2 - a potential SELL on EURUSD earlier today.

Price is below Daily Open and is also below 233 period HA Smoothed, so I am considering SELLS only.

We get a nice signal from the SS indi at the same time as there is a change in the 3 period HA Smoothed and the Winner is in the 85-100 and showing weakness.

We can't win them all, and this trade falls flat, probably breaking even at best.

We can consider a re-entry as we see the Winner histogram cross above the 50 level line and then below again and shortly after that we get another great SS SELL alert, so we enter our sell, and ride it.

Exit is again when the SS USD value line crosses the ZERO mid-point.

Example 3 - An example of when to STAY OUT

Price is meandering...it is above the 233 period HA Smoothed, so we may be looking to BUY, but it is not far below the Daily Open, so we stay away until there is a clear signal one way or the other.

Shortly after there is a break above the Daily Open, but the Winner indicator is already peaking in the overbought zone above 85...need to sit aside and wait for another BUY opportunity.

Example 4 - NOW we can BUY...

Just after the NO TRADE example above, we did get a valid BUY signal.

Price was above the Daily Open and above the 233 period HA Smoothed, there was a nice SS alert, a change in the 3 period HA Smoothed, and the Winner was showing signs of breaking above the oversold zone.

Exit was again when the USD SS value line crossed below the ZERO mid-point. Around 20 pips.

You can start to see how it is perfect when ALL of these indicators line up together, but any 1 of them in isolation may have produced a false signal.

Last post before I head to bed...the SS signals in the examples above came from a setting of 34 as the SDV.

I encourage people to play with this value with different currency pairs and see what works for them. 34 seems a fair "average" for decent signals across all pairs, but I am sure this can be fine tuned for your faves.

Lastly, there will be the occasional decent signal on non-MAJOR pairs, but perhaps not as often as on the MAJORS. I am only trading the majors due to the lower spreads and higher number of signals I am getting from the SS indicator.

Good night and good luck.

EDIT: IF you like what you see here and are getting results, please consider subscribing so you get alerted to any updates as they come out. Cheers!

Good to see you back - Looking forward to seeing how the method has evolved - m1 tf now it seems, for a start, lol. Love it.

Hey kirklea
could u plz share again all the indi s and tmp s in that pic ?
tnx

not needed all is there just rename it as written in expert log in your terminal

i mean these two indi s...

can somebody add two things to this version as well?
1- a little commenting like the Vr from the first post... :
2- alert by cross, after the candle closed and the signal established
it would be great
tnx

Was done a while ago.
Google is your best friend.
Cheers!

tnx but i saw that one before, and its not exactly what i,ve asked and described u knw...

Thanks for new updated rules. Much appreciated.
I would like if you could clarify few things I am confused a little about.
In your post #365 you said -

I have been using an 89 period as the iPRI value.

b) Winner indicator - with an 89 period and with a smoothing average of 5.
This is a recent addition to my toolkit, and is replacing the QQE. I have level lines placed at the mid-level 50, and at 15 and at 85.

But on your screenshots you use not 89 but 34 iPRI value and on Winner not 85 level but 90.

What is then correct?
Thank you for all your contribution.

Yeah sorry about that, mate.

Check out the attached update of the Winner indicator...when I took that screenshot I was probably experimenting with the (34) value and not realising I hadn't changed it back. Apologies for the confusion.

The code has been changed so that it is (89) period now also, where before it was (10) period. I have added in lines at 15 / 50 / 85 in the code so you can drag and drop into a new window and they are there already.

To be honest though, I am experimenting all the time, and the 15 and 85 lines are just guides, you might find that 10 and 90 work better, or 80 and 20. Typical overbought / oversold zone conditions really...and it is a bit RSI like also, i.e. when you notice the histogram crossing the 50 from below, you can use it as a buy signal on top of everything else etc. As long as all signals agree with each other, there should be no dramas.