Correlation trading | Foreign exchange EA download- MT4/MT5 resources
The system is based on the correlation table below and is actually very easy to understand and implement. The purpose of this thread is to fine-tune the settings and develop a simple EA to automate trading.
As you can see in the correlation chart, some currency pairs overreact to anti-correlated price movements of the other two related pairs, always in the same direction. I found that, in fact, when gbpusd and usdjpy moved in the same direction, gbpjpy moved strongly, and gbpjpy also moved in the same direction. From these observations, it does not matter which currency or currency pair starts moving. In fact, when gbpusd and usdjpy show the M15 bar moving in the same direction, gbpjpy moves quite strongly (at which point they should move in opposite directions to each other, since they are negatively correlated pairs). While this anti-correlation setup between gbpusd and usdjpy typically lasts no more than one M15 bar, the price of gbpjpy moved in the same direction for at least one additional M15 bar, with a much larger range than the other two pairs. Manual trading has proven to be very successful.
So, this is the system:
Time range M15
When gbpusd and usdjpy close bars with the same color (both north, or both south), and the high and low range of both bars is at least 10 pips, enter a gbpjpy trade in the same direction at the opening of the new M15 bar.
SL and TP are tested using fixed values (30/20), but they can be defined as a function of the first bar range.
That's it.
Questions for discussion:
1. Stop loss and take profit settings
2. Enter the lowest high and low range for trading
Expert advisor:
The simplicity of this system is urgently needed to be implemented in EA. I'm a programming illiterate so help here would be greatly appreciated.
required input
SL
TP
Minimum input range (in points, for 4 or 5 digit brokers)
Batch news filter, ideal trading hours
The same concept can be applied to other related pairs, as shown in the related table. I only checked out the three pairs mentioned above. I don't know which time frame, minimum high/low range or SL/TP works best for other currency pair groups, so further analysis is needed. An EA that allows three pairs to be defined would be more versatile and allow us to test any set of pairs.
middle East
As you can see in the correlation chart, some currency pairs overreact to anti-correlated price movements of the other two related pairs, always in the same direction. I found that, in fact, when gbpusd and usdjpy moved in the same direction, gbpjpy moved strongly, and gbpjpy also moved in the same direction. From these observations, it does not matter which currency or currency pair starts moving. In fact, when gbpusd and usdjpy show the M15 bar moving in the same direction, gbpjpy moves quite strongly (at which point they should move in opposite directions to each other, since they are negatively correlated pairs). While this anti-correlation setup between gbpusd and usdjpy typically lasts no more than one M15 bar, the price of gbpjpy moved in the same direction for at least one additional M15 bar, with a much larger range than the other two pairs. Manual trading has proven to be very successful.
So, this is the system:
Time range M15
When gbpusd and usdjpy close bars with the same color (both north, or both south), and the high and low range of both bars is at least 10 pips, enter a gbpjpy trade in the same direction at the opening of the new M15 bar.
SL and TP are tested using fixed values (30/20), but they can be defined as a function of the first bar range.
That's it.
Questions for discussion:
1. Stop loss and take profit settings
2. Enter the lowest high and low range for trading
Expert advisor:
The simplicity of this system is urgently needed to be implemented in EA. I'm a programming illiterate so help here would be greatly appreciated.
required input
SL
TP
Minimum input range (in points, for 4 or 5 digit brokers)
Batch news filter, ideal trading hours
The same concept can be applied to other related pairs, as shown in the related table. I only checked out the three pairs mentioned above. I don't know which time frame, minimum high/low range or SL/TP works best for other currency pair groups, so further analysis is needed. An EA that allows three pairs to be defined would be more versatile and allow us to test any set of pairs.
middle East
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