Forex Tradingwithrayner

iloveprata

iloveprata

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is there any correlations with different stock market and currency ? Like if the market is going down, then this certain currency becomes stronger
 
tradingwithrayner

tradingwithrayner

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iloveprata said:
is there any correlations with different stock market and currency ? Like if the market is going down, then this certain currency becomes stronger
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Hi Prata,

The answer to your question is both yes and no.

There will be times when currency and indices will correlate, e.g. during recession when everybody is dumping stocks and running to safe haven like the US dollar. Thus periods like this we can expect a negative correlation to a certain degree between them.

But looking at the US dollar now and the S&P you'd notice they are positively correlated to a certain degree.

And there are times there is zero correlation.

If you want to know currency correlation right now, you can do a google search and you'd get a correlation matrix that you can analyze.

Let me know if that helps!

Rayner
 
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pandasr

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tradingwithrayner said:
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Just wanna comment on 1 thing that was mentioned in the video. For a R:R of 1:2, you just need to be correct more than 33% of the time for a positive expectancy, rather than being correct half the time.

For a RR of 1:1, you need to be correct more than 50% of the time for a positive expectancy.
 
tradingwithrayner

tradingwithrayner

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pandasr said:
Just wanna comment on 1 thing that was mentioned in the video. For a R:R of 1:2, you just need to be correct more than 33% of the time for a positive expectancy, rather than being correct half the time.

For a RR of 1:1, you need to be correct more than 50% of the time for a positive expectancy.
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Yes you're right. I don't dispute that :)

Rayner
 
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shawnwong

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Good advices but I believe it all depends on your trading system. Its not a one model for all. I have better result with fixed target and stop than variable target ...
 
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prudent76

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shawnwong said:
Good advices but I believe it all depends on your trading system. Its not a one model for all. I have better result with fixed target and stop than variable target ...
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Concur with that. Fixed TP and SL work better. Thousands of my back-tests show that scaling in degrades performance. The main reason is that range periods and short lived trends occur much more frequently than those mega trends like the yen trade described.

One well known trading system you can back test is the Turtle trading method. Scaling in was a key pillar in that system. It's far more robust than Rayners method, but is a consistent looser in the forex market.
 
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shawnwong

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prudent76 said:
Concur with that. Fixed TP and SL work better. Thousands of my back-tests show that scaling in degrades performance. The main reason is that range periods and short lived trends occur much more frequently than those mega trends like the yen trade described.

One well known trading system you can back test is the Turtle trading method. Scaling in was a key pillar in that system. It's far more robust than Rayners method, but is a consistent looser in the forex market.
Click to expand...

After so many years, my trading becomes more mechanical. Only open trade is done manually (can be fully automated but just wanna have some human involvement). One adv of this kind of trading method, it eliminates emotion involvement. I find it pretty helpful if you are in a losing streak. My backtest results also show better performance for fixed TP & SL. However, its only for me. Its like between small wins large loss or large win small losses, which is better? Both can be profitable ...
 
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