Correlation realtime indicator

BASIC CONCEPT IN CORRELATION 

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The correlation coefficient factor always

ranges between -1 and +1.

 A correlation of +1 implies 

that the two currency pairs will move

 in the same direction 100% of the time.

 A correlation of -1 implies 

the two currency pairs will move

 in the opposite direction 100% of the time

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entering trade on positive correlation rules: 

we check the correlation factor value in daily/hourly time frame for the first

pair against second pair 

if correlation value of the first pair is above +0.80, then it is

treated as positive correlation, same time  check the

indicator2.ex4 for checking valid buy/valid sell signals

when buy arrow comes in indicator2.ex4, check candle high of the arrow

add 1 pip with that value, if it comes then it is treated as valid buy

when sell arrow comes in indicator2.ex4, check candle low value,

less 1 pip from that value, if it trades and below, it is treated as

valid sell.

since correlation value is +0.80 and above, we treat as same

directiont rades

once indicator2.ex4 gives buy,we buy equal qty in first pair

and in second pair, with same direction

we can put target and stoploss as optional, or leave for signal to signal

example : target : 30 pip, sl as reverse signal in first pair for both first and second pairs

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entering trade in negative correlation concept :

if correlation value of the first pair is below -0.80, against the

second pair, it is considered as negative correlation sametime  check the

indicator2.ex4 for checking valid buy/valid sell signals

when buy arrow comes in indicator2.ex4, check candle high of the arrow

add 1 pip with that value, if it comes then it is treated as valid buy

when sell arrow comes in indicator2.ex4, check candle low value,

less 1 pip from that value, if it trades and below, it is treated as

valid sell.

since correlation value is below -0.80  we treat as opposite

direction trades

once indicator2.ex4 gives valid buy,we buy with input qty in  first pair

and sell same qty in second pair, as opposite direction

IF indicator2.ex4 gives valid buy   we buy first pair and sell second pair

IF indicator2.ex4 gives valid sell   we sell first pair and buy  second pair

we can put target and stoploss as optional, or leave for signal to signal

example : target : 30 pip, sl as reverse signal in first pair for both first and second pairs

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INPUT VALUES FOR THE E.A. AS FOLLOWS

INPUT QTY : 0.10

ENTER FIRST PAIR NAME  :

ENTER SECOND PAIR NAME :

STOPLOSS   : 0 MEANS SIGNAL TO SIGNAL, OR WE PUT ANY VALUE AS COMBINED STOPLOSS

TARGRT PIP : 30 PIP 

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re entry :

once target hit, check correlation value again, and repeat process

or

if reverse trade generated by indicator2.ex4, check daily/hourly correlation

value, and repeat process

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http://www.investopedia.com/articles/forex/05/051905.asp

http://fxtrade.oanda.com/analysis/currency-correlation

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