10.4 A Complete System

[kwanann]

double cssLong = myCSS[libCSS.getCurrencyIndex(StringSubstr(symbol, 0, 3))];
double cssShort = myCSS[libCSS.getCurrencyIndex(StringSubstr(symbol, 3, 3))];
double myDiff = libCSS.getCSSDiff(symbol, PERIOD_H1, 0);
Andy

Andy,

any particular reason why i cannot just use the actual value of mydiff to calculate, instead of comparing csslong and cssshort?

[mjws00]

OK Andy, let's take another example. Last week EURAUD went up 500 pips. EURJPY went down by almost the same amount. Buy Euro, sell Euro - best of both worlds. Why on earth would I not take those trades?

That trade is Short AUDJPY. Buying and selling Euro at the same time just costs you extra spread and interest. There is no advantage in it. You just decided to pay extra to hedge EUR and tie up margin.

Net exposure is what moves your account. It isn't a question of style. It is fundamental math.

If it somehow helps you, cool. But more likely it simply hides that you thought you were risking 1% on two different trades. In reality it was a single trade.

People are trading 26 pairs and not considering correlation, or their net positions. All it does is hide their actual risk. It is good when it's good. A disaster when it's not. But really just another tool to over complicate things so you think you are risking (x) when your position is much different. It is easy to make mistakes.

I'm certainly interested in whether there is an edge to taking 7 jpy pairs, vs 1-2. It may be that it averages out better than our signals let us pick and choose. But Yen exposure has to be held constant in order to judge that.

If it ain't broke don't fix it. If you are raking it in, awesome! The mechanics are still the mechanics understanding not ignoring them is generally a good thing.

Mike

Edit: LOL. Told ya it was easy to make mistakes. Typo corrected.

[kwanann]

Actually if you were to consider, although you have 26 pairs, in actual fact you only have about 4 to 5 pairs are mutually exclusive

e.g GBPUSD, CADJPY, EURCHF, AUDNZD are all exclusive pairs and any others can be resolved to one of these pairs.

Whether you should trade ALL 26 pairs is up to you. Of course if it goes your way, well and good you will rake in x times the green pips. When it doesnt, it will go wayy against you

[Lancaster]

I have a question regarding the setup on JPY pairs at the start of this week,

A lot of these pairs have crossed the 240 during the recent JPY strength. Is the consensus that a correction is likely to bring it back across that line in a general sense, and if so, does that drive anybody to dismiss them for valid 10.4 setups on the supposed 'wrong' side of the 240?

[nanningbob]

I have a question regarding the setup on JPY pairs at the start of this week,

A lot of these pairs have crossed the 240 during the recent JPY strength. Is the consensus that a correction is likely to bring it back across that line in a general sense, and if so, does that drive anybody to dismiss them for valid 10.4 setups on the supposed 'wrong' side of the 240?

I am playing JPY weakness and am wary of corrections. We are now in the middle of their bond buying but some other events took place which caused this dip in the xxx.jpy UT. If you use a simple moving average like a 14 or 20 (doesnt matter) and just following it up and bail out when it is crossed you will be fine. I expect the big boys will be jumping in for the ride this week. The only question marks will be the aud/jpy and nzd/jpy because it will be interesting to see which one weakens the most. The AUD and NZD will continue to weaken until they adjust to the new Chinese economy. What I mean by that is China's economy has been roaring at 8-10% a year and that is not sustainable. China now recognizes its growth will now be in the 4-7% range. Their goal is going to be 7% but even that will be tough to maintain long term. So China's economy will still grow but at a slower pace which means AUD and NZD will settle into a new range of highs and lows. I dont know where that will be but at some point they will find bottom and enter into their new range. I think the AUD being higher than the dollar days are over for now. So with that in mind I go and trade the JPY fundamental using a MA line to keep me from getting caught in the end of the month dips.

[Ingot54]

Hi Bob,

While thinking about last week I got a brainfart.

What if we trade the currency indexes instead of the crosses?
This would limit the numbers of charts to 8, and be very much in line with the CSS on the info page.

I just don't know of a broker that offers them all.....
(Jeremy?)

I found one, Liteforex uses Sigtrader and offers the 8 indices.
Loaded the charts, see if it has legs ....

Nice work Gertje. This might reduce the risk of correlated trading ... double trades... extra spread costs ... and so on.

I have reduced the pairs I follow down to 10, from the original faceful on my screen.
I do not follow the CAD or the CHF at all - and trade only 2 NZD pairs (GBPNZD and NZDJPY)
I have ample trading with the remainder.

It helps me focus, and keeps the brain fresher with less info overload.
And I have the added bonus of fewer CPU issues and a much faster response time when switching between both Time Frames and pairs.

[I had earlier reduced the CPU loading by shortening the CSS to 50 bars and all the Pivots and RSI2 settings to 100 bars. Immensely speeded charting.]

Your work has coincided exactly with this current discussion, and if you were to commence a new thread to deal with this, I would be a participant in exploring the usefulness of that.

Thanks for your research.

[Aus67]

I have a question regarding the setup on JPY pairs at the start of this week,

If you use a simple moving average like a 14 or 20 (doesnt matter) and just following it up and bail out when it is crossed you will be fine.

Hi Bob, do you recommend any particular timeframe to apply this MA to?

[mjws00]

I got no crystal ball on JPY. I kinda like Pipstubborns thought on taking the trade ala 10.4 with an eye on the fact that it could shoot violently long on BOJ activity. i.e play it tight and possibly small when short.

I skipped the short setups last week on xxxjpy, ej had a valid long which I took. Nasty 450 pip EJ shakeout here. This week I will try and play with less bias, but eyes wide open on my shorts.

I was biased long with Bob, but believe they will pick their timing in a manner that won't let a bunch of funds and retails front run them at the beginning of the month. They killed the weak longs on this last move, and had a chance to buy lower if they wanted to. IMHO that opens up things nicely for them to move it a ways if they choose. To me that is additional short risk.

I intend to take the correlated trades as I see them, so I will just reduce size a bit and spread yen risk across the various pairs. I am dying to find some sort of edge in the volume approach to this system. Last week there were some jpy pairs BUY, some SELL. Right now all are sell ala 10.4

Got a board with some lights, when CSS confirms, I'll fire first ask questions later. No counter trades necessary, EJ, GJ will be there to get us long on Yen weakness IMHO.

Mike

[nanningbob]

I have a question regarding the setup on JPY pairs at the start of this week,

If you use a simple moving average like a 14 or 20 (doesnt matter) and just following it up and bail out when it is crossed you will be fine.

Hi Bob, do you recommend any particular timeframe to apply this MA to?

Can anyone guess which TF I use???
Just a wild guess will do.

[VirtualFM]

I have a question regarding the setup on JPY pairs at the start of this week,

If you use a simple moving average like a 14 or 20 (doesnt matter) and just following it up and bail out when it is crossed you will be fine.

Hi Bob, do you recommend any particular timeframe to apply this MA to?

Can anyone guess which TF I use???
Just a wild guess will do.

It has to be a wild guess, as you never mentioned your favorite TF...