Developing a System #2 (Entry system for hedging correlated pairs)
Submitted by Edward Revy on May 29, 2008 - 05:13.
Submitted by Grant
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We need a decent entry system for hedging two positively correlated currencies.
These would be EURCHF and USDJPY. The pip cost is almost the same everyday, very close. And the volatility of USDJPY is 26% higher daily range than EURCHF.
So we would sell 1.26 lots of EURCHF, and buy 1 lot of USDJPY.
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The direction of change in correlation is what you are after, isn't it? CORREL will either be going up or down regardless of the period.
please can i have indicators that are in this stratery?
ben messkin
Hi Ben,
The indicator hasn't been shared yet by the author.
Here is one I found on the forums:
PairDifference.mq4
Kind regards,
Edward
Like Scott said.. you need to use it with another indicator. I use this method very successfully ;)
best of luck
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