Hi guys, this is my first seriuos post about some trading ideas. I've been trading live the Going Home system for different months implementing it simply putting the stoch-difference indicator under the chart instead of trading a basket, (directly EURGBP instead of EURUSD + GBPUSD) knowing that in the forex market most of the pairs are mathematically derived from the originary ones. So i know that this is basically a counter-trend system, even if with very good signals.
So, with the additional help of technical analysis I had great results ( the original account had been decuplicated in 7 months) until a black-swan trend on NZDCAD almost wiped out my account in January.
So I began to look for a solid way to filter out this kind of killer trades and after a lot of tries i decided to try out crossing negative correlated pairs an see what happened.
What I found out, visually backtesting it, amazed me: the signal provided by negatively correlated pairs, unlike the positive ones, goes with the trend . Simply, instead of signaling a possible reversal it signals a possible end of the retracement, exactly the same principle of reverse divergence compared with the classical divergence.
I know it could seem a little bit counterintuitive and I am the first one who thinks that seems too good to be true, but I strongly suggest to Steve or whoever wants to do it to add this feature to the EA and do some backtest to see what happens.
Greetings from Sardinia
P.S. Today i took the first two trades this way and worked perfectly.
, using the chart of the synthetical pair with negative correlation can be really confusing, so I won't do it anymore. Anyway, good news are that the trade would have worked perfectly opening two positions, buying one and selling the another one that originated the cross (see the images below).