Developing a MultiCurrency trading plan
Good idea. You are looking for "little correlation", good luck on that.
All currencies are related with or without your knowledge. They are either diverging or converging.
I can say this because they all belong to Forex family. And thus, they affect each other directly and indirectly.
To assume and say 1% relation, 2% relation is not effective because they change and affect each other all the time!
Anything can happen in this dysfunctional Forex family with all their currency members.
LB
When you have spent a bit more time on correlation, you realize just how linked together everything is...
This list
2pips EUR/USD - short term - m5-h1
4pips GBP/USD - short term - m5-h1
3pips USD/JPY - short term - m5-h1
3pips AUD/USD - long term - DAILY
3pips USD/CHF - long term - DAILY
Has some of the highest correlations in Forex
They are all majors so will all be affected by dollar value changes
Any change in risk aversion will usually affect all of these
Just having lots of systems on lots of pairs is no guarantee of success, many will likely share a common vulnerability somewhere,
e.g. being long EURUSD and short USDCHF is the same bet (on the dollar)
Re this > I was thinking of removing GBP/USD because of it's link to EUR/USD and high spread, but on short time frames, it was not listed as correllating to EUR/USD as bad as I thought
Cable does have different 'harmonics' to eurodollar but both are vulnerable to dollar news events flipping you out of a position
So for the crucial period, long enough to stop you out, they can be correlated 100%
My 2c worth
-BB-
LB
When you have spent a bit more time on correlation, you realize just how linked together everything is...
This list
2pips EUR/USD - short term - m5-h1
4pips GBP/USD - short term - m5-h1
3pips USD/JPY - short term - m5-h1
3pips AUD/USD - long term - DAILY
3pips USD/CHF - long term - DAILY
Has some of the highest correlations in Forex
They are all majors so will all be affected by dollar value changes
Any change in risk aversion will usually affect all of these
Just having lots of systems on lots of pairs is no guarantee of success, many will likely share a common vulnerability somewhere,
e.g. being long EURUSD and short USDCHF is the same bet (on the dollar)
Re this > I was thinking of removing GBP/USD because of it's link to EUR/USD and high spread, but on short time frames, it was not listed as correllating to EUR/USD as bad as I thought
Cable does have different 'harmonics' to eurodollar but both are vulnerable to dollar news events flipping you out of a position
So for the crucial period, long enough to stop you out, they can be correlated 100%
My 2c worth
-BB-
When it comes down to it, I've come up with this:
EUR USD - short term charts
15m reversal system
5m trend following system
GBP USD - short term charts
15m reversal system (same as the one for EUR USD, but peaks and troughs differently enough from EURUSD)
5m trend system (Completely different system than EURUSD uses. This one is a very careful *wait for the perfect signal type*)
I haven't had any wonderful results on the other pairs, a few systems work by coincidence on them, but not well enough that I want to use them.
Anyone who knows how to attack the USD/JPY pair, give me a hint!
Sounds like a trading plan if I've heard one. One way to have a good idea, is to have allot of ideas (I got that line from somewhere). Anyway, what you're attempting sounds allot like my original plan. Trade as many strategies as possible on as many pairs as possible, giving that the trades are not Correlated (don't want to be 20 lots in the same direction without realizing it). Because of that, I've found myself hopping from strategy to strategy the last few months. I like the process because I'm learning something about everything but I'm not mastering anything. This could be one draw back to this approach. The other could be over-trading. Trying to avoid Correlated pairs, might cause you to lose some opportunities so keep an eye open for that. When I think Multi-Currency Trading now-a-days it's to capitalize on the Correlation and Not to avoid it.
Capitalize on correlation is good, in a way that's what I'm going for. I'm using the majors because of lower spreads but will have slightly different results from each and hopefully have signals all the time, with smaller lot sizes that are shared amongst the collective.
What comes first still is performance. If the system has a profit factor of 1.95, obviously I gotta give it the right of way over my margin and say, "if you get a signal, take it, don't worry about what this other EA's doing".
Anyone who knows how to attack the USD/JPY pair, give me a hint!
Well its not like anything else...
For USDJPY, here a couple of ideas
1) For US session only, look at the M5 chart with the 5 period smoothed MA when confirmed by the 'SFX_MA_On_CCI' indi from here
2) Look at this https://www.mql5.com/en/code/9730, be prepared to correct some of the code though
-BB-
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I'd like to share my knowledge here and ask for pointers on developing a trading plan for my EAs. I'm getting a VPS soon and planning on running a demo of my system.
GOALS:
To have up to 10 systems running simultaneously
To have as little correllation as possible between these
To use different methods as much as possible for diversification
To use strategies on different time frames as well as pairs
To use pairs with the cheapest spread
To use a reasonable amount of margin and regulate entries between all systems to achieve this
CURRENT SETUP IDEA - Broker(FXDD):
2pips EUR/USD - short term - m5-h1
4pips GBP/USD - short term - m5-h1
3pips USD/JPY - short term - m5-h1
3pips AUD/USD - long term - DAILY
3pips USD/CHF - long term - DAILY
I used the correllation chart from https://www.mql5.com/go?link=https://www.mataf.net// to find out which pairs work better on lower and higher time frame together. I used FXDD site to pick out which pairs had lowest spreads. What I have is a culmination of this. Does anyone see any red flags here? Any pairs that will produce results too similar?
I was thinking of removing GBP/USD because of it's link to EUR/USD and high spread, but on short time frames, it was not listed as correllating to EUR/USD as bad as I thought.