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Simple Correlation Indicator System

  • #61
  • Edited 10:36am Jun 8, 2016 8:06am | Edited 10:36am
How about AUDUSD ?

Risky because on Daily ressistance?

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EDIT:
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  • #62
  • Jun 8, 2016 11:34am Jun 8, 2016 11:34am
Quoting Kubiasty
{quote} STEP 4: EXIT STRATEGY - stay in the trade until you notice the lines starting to converge. At the close of each candle, recalculate the values and check whether the new combined value is falling under 52. At the close of the first candle that shows a combined value < 52, exit the trade. But on M15 or H1 ??
On the 15M, as this fives you better entry and exit...i.e. if you placed your trade using the 15M chart entry signal, use the same TF for the exit.

To be honest I would close this position now and wait for a bit... The NZDUSD is close to a yearly high - check the daily chart - massive resistance here.

Also, if you now calculate the combined value at the recent close on the 15M, it is only 26 or so, which is the first candle close to fall below 52. Time to exit according to the strategy rules. I could be wrong - price is price and the markets are always right, not us...but better to lock in profit than risk it at such a precarious level where resistance is strong...just my 2 cents!
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  • #63
  • Edited 12:09pm Jun 8, 2016 11:42am | Edited 12:09pm
Quoting Kubiasty
How about AUDUSD ? Risky because on Daily ressistance? {image} {image} {image} EDIT: {image}
Yes a little risky, but again check the underlying strength on the higher TF charts, and use the smaller TF to check for an entry. AUDUSD seems very bullish right now...I might wait until either an obvious break at resistance or an obvious bounce back down. The 15M chart will show you a clear signal when it decides where it its going.

It is only 15 minutes or so away from the close of the H4 candle (on MY platform anyway - I realise different brokers show differing candle formations depending on where their servers are located...something that bugs the hell out of me). Check the 15 now...I get the feeling we are losing bullish momentum.

EDIT: The Daily, Weekly and Mothly charts all show a massive swing to the upside, so if there is a breakout it could be soon...if so I would be targeting 0.7670 or thereabouts. But we really need a strong break above where we are now. At this price level, with all the resistance we see, I would use a H1 chart as the minimum TF to look for a clear break signal. A 15M might be a little choppy at these levels.
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  • #64
  • Jun 8, 2016 11:52am Jun 8, 2016 11:52am
Quoting MidnightRun
{quote} First, thank you for the indicator, method and all your posts and clarifications. Need to double check this: we calculate the separation strength (i.e. > or < 52) ONLY in the indicator for the current time-frame, right? The separation in the next higher TF should be visually apparent, but does not need to meet the 52 requirement. Is this correct? Thanks again!
Hi and thanks for your interest in this system.

As an example, if I am using the H1 chart as my current chart (Window 2 display) and the H4 beneath it to show underlying strength, I am waiting for a cross on the H4 after a close, but the close here does not have to be a great signal above 52 or anything. In some examples I have given, i.e. immediately after a strong new release, the higher TF has exploded and the cross has been in the low 100's, which is cool. But basically we are just seeking confirmation of a shift in strength between the two currencies on the higher TF, and then searching for a clear signal >52 on the smaller TF.

I would be also looking at the 15M to time a better entry - I just don't like having all 3 TF on the screen as they take up too much room.

Hope that clears that up for you.
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  • #65
  • Jun 8, 2016 12:06pm Jun 8, 2016 12:06pm
Quoting kirkleaforex
Hey guys, Have been using this correl8 indi on XAUUSD using multiple TF with some success, but just wondering if somebody knows how to add a crossover alert to it, preferably including email and PUSH notifications. Just can't justify stare at the screen waiting for a signal to happen! Any and all help greatly appreciated! See attached screenshot for example of how powerful this can be. Notes on System as it relates to screenshot 1) correl8 indi shows USD strength rising above 0 line 2) correl8 indi shows XAU strength dipping below 0 line 3) Sell...
Why you need to trade with all these indicators. Just trade the price action!
  • #66
  • Jun 8, 2016 12:21pm Jun 8, 2016 12:21pm
Quoting sharingan9
{quote} Why you need to trade with all these indicators. Just trade the price action!
Basically, if I could trade naked I would. I have tried it and it just doesn't suit me. I really like a visual system that confirms both underlying strength of one currency against another and this indicator shows that in great detail, right down to volatility and momentum of a shift in strength.

The trouble with this game is you need to spend many hours watching screens to learn enough about price action to be able to consistently turn a profit, and people who are new to this forum and trading in general just don't have the screen hours to know the many nuances that price action displays. That's why this forum exists - to share and help others. I have taken much from this forum since I joined and now it is time to give back.

If you can trade naked, that's great - I respect it. I am certainly no expert at this, but after nearly 10 years, this is the system I have decided to stick with, and believe me it works like a charm.
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  • #67
  • Jun 8, 2016 12:36pm Jun 8, 2016 12:36pm
Screenshot shows AUDUSD 5M chart with 15M as the higher TF display in Window 3.

There has been a bearish cross on both TF's, indicating the bullish move is over for now. I won't trade against the underlying longer term bullish trend, so I am sitting aside and waiting for either a break above current resistance or a definite move down on a higher TF i.e. 15M main TF with H1 as higher TF.
Attached Image (click to enlarge)
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  • #68
  • Jun 8, 2016 12:46pm Jun 8, 2016 12:46pm
SCreenshot shows GBPUSD H1 in main chart with H4 as higher TF in Window 3.

A definite bearish move happening, and with 20 minutes to go on this hourly candle, I am expecting a bearish cross on the H1 in Window 2.

However there is still no cross on the higher TF H4, so this would be a mixed signal. I will wait until a bearish cross on the close of an H4 candle, and then wait for the next bearish cross after that on the close of an H1 candle.

If I see a bearish cross on the close of an H1 candle, I will move to the 15M chart and time the entry from here, waiting for a combined separation value of 52 or greater to confirm a downside entry.

As far as the H4 display in Window 3 goes, the underlying trend is still bullish.
Attached Image (click to enlarge)
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  • #69
  • Edited 1:54pm Jun 8, 2016 1:02pm | Edited 1:54pm
Just some additional thoughts regarding multiple TF analysis using this indicator. Please remember that I am learning more about this every day I post here; this thread is evolving as I learn more about this indicator and its' potential. I want other people's input also though, so if you notice you are learning something in particular about the behaviour of this indicator in certain situations, or on certain time frames, let us all know.

For now though, I am slowly coming to the conclusion that this is best used with the H1 as the main chart display, with H4 as the underlying trend in Window 3 with entries and exits coming from signals on the 15M.

This may or may not suit people reading this - some traders love to scalp, and this is probably still useful to you if that's your style. If it is, I would switch to a 15M chart as the main display, with H1 as the underlying trend chart and the 5M to time your entries.

Or if you are really impatient, try using the 5M as the main display with the 15M as the underlying trend strength, and using the 1M to time your entries! But don't lose sight of the bigger picture - the higher time frames will always show you clear S&R lines which the smaller TF charts will not. Always plot your larger TF S&R lines first!

My main focus is changing now toward catching larger moves in line with the medium to longer term underlying strength of the currencies and exploiting any shift as they cross over. The key for me is patience, and if you knew me at all you would know that I am a scalper at heart, but I am becoming more patient with time and experience.

But, if you like to be constantly finding opportunities, this indicator offers AUD, EUR, GBP, NZD, CAD, CHF, JPY and XAU paired against the USD...this is 8 charts that you could potentially be waiting for signals from if you prefer USD crosses...never mind the other currency cross combinations available! There is around 30 currency pairs available to you with this indicator - every day there will be something happening, surely!

And with the newly coded indicator alert function that is coming you won't have to stare at a screen waiting for these opportunities to surface! Stay tuned.
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  • #70
  • Jun 8, 2016 2:14pm Jun 8, 2016 2:14pm
Last comment before I go back to bed!

Always be wary of when you are trading, i.e. times of low volatility.

The Asian session can be brutal on your account when there is nothing but sideways movement, which is generally the case. In many cases you may get a perfect entry signal, but there is just not enough momentum in that trading session to warrant taking the trade.

The final hours of New York as it leads into the Sydney open can be painfully slow also.

Best times to trade, as everyone should already be aware, are those sessions that offer the greatest chance of higher volatility / liquidity. London (particularly the open) and especially the London / New York overlap.

Give yourself a chance and don't trade this system during quiet times unless you are on a demo and just want to practice and learn how everything works.
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  • #71
  • Jun 8, 2016 2:21pm Jun 8, 2016 2:21pm
One indicator I find useful is the "Vertical Line moves with price" indicator. It plots a vertical line right through the most recent closed candle, which may be useful when calculating the values of the lines as they expand and contract.

Just hover your mouse over each of the currency strength coloured lines, slightly to the right of the vertical line, and it will display the closing value for that candle.

Don't hover your mouse too far to the right into the area of the currently forming candle though; you will get the wrong values displayed!

See screenshot and the little popup display window when I hover my mouse just to the right of the vertical line. It identifies the USD green line has a value of 12.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 47 KB
Attached File(s)
File Type: ex4 Vertical Line-moves with price.ex4   2 KB | 928 downloads
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  • #72
  • Jun 8, 2016 5:20pm Jun 8, 2016 5:20pm
Hello Kirkleaforex,
What do you think about using the !Correl8 indicator with a Daily chart only?
  • #73
  • Jun 8, 2016 7:01pm Jun 8, 2016 7:01pm
Thank you Kirkleaforex for a great indicator and system. I've been looking back at charts and the system seems simple and profitable.

Though, I have a problem. The indicator is not working on XAU/USD... Look at my screenshot below. Can you help me?
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  • #74
  • Edited 8:23pm Jun 8, 2016 7:11pm | Edited 8:23pm
Quoting Darryl
Hello Kirkleaforex, What do you think about using the !Correl8 indicator with a Daily chart only?
Hi Darryl thanks for being here.

If your trading style is looking for larger moves then this indicator is great for that. In this case i would use the D1 as the main chart, and have the weekly running underneath to display the underlying trend strength. You then have several options:

1) Trade only in the same direction as what the weekly is saying, taking a trade every time there is a strong D1 cross greater than 52 and closing it when combined values drop back below 52, or;
2) Use the H4 chart to find an entry once the W1 and D1 agree, and use the H4 as your trade filter, entering and exiting trades when the H4 combined values rise or fall beyond 52, or;
3) Counter-trend trade using H4 and D1 against the weekly, ignoring the W1 underlying strength. If you were to do this however, i would want to see a strong cross on the D1, wait for a retrace and then time your entry after a strong cross on the H4 for confirmation.

There's so many ways you can use this, but those would be my suggestions. Obviously on the larger time frames keep your lot size within sensible MM guidelines and use a tight stop at a recent swing high / low, but if you learn how to read this indicator well, particularly using multiple time frames, you will no doubt pick up some great pippage! Good luck and stick around.
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  • #75
  • Jun 8, 2016 7:24pm Jun 8, 2016 7:24pm
Quoting swetrader
Thank you Kirkleaforex for a great indicator and system. I've been looking back at charts and the system seems simple and profitable. Though, I have a problem. The indicator is not working on XAU/USD... Look at my screenshot below. Can you help me? {image}
Hi swetrader and thanks for your interest in this thread. I wish I could take credit for the indicator itself, but it was just something I found when searching Google. Kudos to the person who coded it, I say!

Regarding your issue with XAUUSD not showing, I would try the following:

1) Check your indicator settings first. Sometimes when you have "ShowAuto" set to true it is a little buggy, so set this to false and then set the USD and XAU to true.

2) The XAU may not have it's full history loaded into your MT4 data history. This process is a little more involved, so I will provide a link offered by my broker Pepperstone, which explains step by step how to load historical data for a particular pair.

https://pepperstone.com/en/support/m...mt4-chart-data

If neither of these steps work, come back to me and I will research this further for you. Hope you get it sorted though...XAUUSD is an exciting pair to trade!
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  • #76
  • Jun 8, 2016 8:00pm Jun 8, 2016 8:00pm
Hi Kirkleaforex, thanks for the detailed answer. It makes a lot of sense.
  • #77
  • Jun 8, 2016 8:25pm Jun 8, 2016 8:25pm
Quoting Darryl
Hi Kirkleaforex, thanks for the detailed answer. It makes a lot of sense.
Very happy to help. I am committed to this thread and to the success of the system for the people who follow it.

Stick around as I have some great things happening in the pipeline; the sort of stuff that keeps me awake at night!
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  • #78
  • Jun 8, 2016 9:36pm Jun 8, 2016 9:36pm
LOSS of 10 pips on AUDUSD.

Not all trades go our way, and using this system is no exception. Price is price, and the markets are always right. No indicator in the world can give us a magic bullet to ensure every trade goes our way.

See screenshot - AUDUSD broke through resistance and immediately returned to this same level and found new support. We wait for another signal and we get it...Long entry taken.

But then price stalls and ends up crossing back again. Our rules are to exit the trade once the main chart TF correl8 combined values drop below 52, and none of these line values give us that until it's too late and there is a reverse crossover against our position.

Checking the next highest TF above, H1, we notice weakness setting in also.

Now the trade hasn't hit our SL which is below today's open and sitting at yesterday's support, but take a look at strong resistance where price is on the D1 chart, and we realise we probably should not have gone for this trade to begin with.

Note to self - always check higher TF support and resistance! Lucky it was only 10 pips lost (plus spread)...

Based on the price action on the D1 (possible bounce off major resistance), and what is showing immediately on the H1, I am now seeking selling opportunities for the AUDUSD. Will wait for price to break below 0.7460 (strong recent level) and then wait for signals from H4 correl8 before seeking out opportunities to catch any downward movement.
Attached Image (click to enlarge)
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  • #79
  • Jun 8, 2016 11:25pm Jun 8, 2016 11:25pm
Quoting kirkleaforex
LOSS of 10 pips on AUDUSD. Not all trades go our way, and using this system is no exception. Price is price, and the markets are always right. No indicator in the world can give us a magic bullet to ensure every trade goes our way. See screenshot - AUDUSD broke through resistance and immediately returned to this same level and found new support. We wait for another signal and we get it...Long entry taken. But then price stalls and ends up crossing back again. Our rules are to exit the trade once the main chart TF correl8 combined values drop below...
Hi Kirkleaforex,
If you advise what is the basis of calcualtion then we can think of using this indicator for trading:

MT5 indicator coded by PipPod says the indicator plots the correlation between eight currencies calculated from twelve symbols with one of the following indicators:

  1. Moving Average
  2. Moving Average Convergence/Divergence
  3. Stochastic Oscillator
  4. Relative Strength Index
  5. Commodity Channel Index
  6. Relative Vigour Index
  7. DeMarker Oscillator
  8. Momentum Index
  9. Triple Exponential Index

Your indicator MT4 relies relies on which calculation and which one you have found reliable for profit in gold trading?

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  • #80
  • Jun 9, 2016 12:22am Jun 9, 2016 12:22am
Quoting simnz
{quote} Hi Kirkleaforex, If you advise what is the basis of calcualtion then we can think of using this indicator for trading: MT5 indicator coded by PipPod says the indicator plots the correlation between eight currencies calculated from twelve symbols with one of the following indicators: Moving Average Moving Average Convergence/Divergence Stochastic Oscillator Relative Strength Index Commodity Channel Index Relative Vigour Index DeMarker Oscillator Momentum Index Triple Exponential Index Your indicator MT4 relies relies on which calculation...
Hi simnz and thanks for your question, however as the indicator doesn't belong to me I have no idea as to what the basis of calculation is in the coding. I don't use MT5 and so I haven't seen the example that PipPod has written, but I do know that the MT4 version does not offer all of those user inputs that you have listed.

I can see in the MT4 code itself where I believe it is doing the calculations, however I don't know how to read and understand it. Sorry I know that isn't much help to you.

To be honest I am less interested in the why and how of the correl8 indi, and more interested in the fact that it just seems to work. I prefer to simplify things - I don't need to understand why it works, it just does.

If you know how to read MT4 code or know someone that does, please open up the .mql file and examine it. That's about the best help I can be for now, sorry!
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