Get started

Tradecorrelation

DONT SWIM AGAINST THE CURRENTTHIS IS INSANE - Technically speaking the market in general is in a downtrend. a recession or correction. it should not matter. what is insane is am taking a Long trade on such a downtrend market. As any trading Guru would say " dont swim against the Current " dont trade against the trend. But I did. well I make exceptions. let me explain. The Long-term(M) is in a downtrend. the price is coming strongly overselling into a fresh DZ. I set my ENTR at 27.xx with STP-LOSS below the DZ; small risk with plenty room for profit to run. my risk to reward ratio adds up. I always calculate my estimates Rs (risk) before I calculate my estimated Rw (Reward) When price enters the DZ: there are three possible outcomes; - Trend Reversal - The DZ will hold & trend changes. Big win & small Loss - Correction - The DZ will hold for sometime, giving small win and small Loss - Breakthrough - The DZ does not hold at all, giving a small loss; I am OK taking that small loss; it is within my trade plan What I was looking for was a correction, happy to take this small Long profit in such a downtrend market. to do this type of trade & swim against the current one much be very vigilant; tight STP loss is key. What I did here, price entered the DZ, the correction began; I covered 1/2 of my position; I took $3 of each share, & let the rest (other 1/2) run; sadly but predictably, the correction lost momentum in a heavily bearish market. I readjusted my STP LOSS to exit trade at breaking even.
NASDAQ:INTCLong
by greatful-me
SHORT CABLE: HISTORICAL GBPUSD v EURUSD CORRELATION CYCLESOn the 1D time frame, a strong positive correlation relationship emerges - where previously on the 4h time-frame the correlation looked relationship-less and "noisy". However, looking back at the Daily correlation over the last 2-3 years for GU and EU one noticeable and significant trend emerges - A steep fall in correlation, either from positive-lower positive, or positive to negative, is historically ALWAYS followed shortly by a plummet/ Sell-off in GBP$. Thus as we see below GU v EU correlation has been descending and has just turned negative - so in my opinion we should consider selling GU as if history holds true an aggressive sell off on the daily is close by. I also like short GU fundamentally over the next 4 weeks especially but also 12months for: FOMC 16th June - hawkish or hike must push GU lower. BREXIT 23rd june - UK Referendum uncertainty will inevitable price GU lower than 1.43 at somepoint before or on the 23rd, even if briefly - just like GU priced lower as Scottish Independce referendum loomed (which is less of a risk but equally as likely to happen) Economic Divergence - Fundamentally the UK economy and financial markets are not as robust as the US due to a lack of innovation and a poor technology sector, which massively will affect productivity, the recovery and future growth (especially as moores law becomes questionable). This economic divergence will be priced in as lower GU as investors in the long run price such economic differentials as speculation in future monetary policy divergence.
Short
by QuantumLogicTrading