Do you believe your knowledge of intermarket relationships enhances your performance?

[annaland]

Quote from Gabfly1:

Essentially, yes. I am trying to isolate the discussion to those markets that are sufficiently "related," either positively or negatively, such that a movement in one gives rise to placing a trade in another. Again, I don't care which markets traders use or what their criteria for sufficient relatedness may be. I don't even care how one market may generate signals for another market. My only interest is whether people rely on interrelated market relationships in their trading, whatever those relationships may be, and answers to my two questions posted earlier.

Ok, I'll stop.

 

[Gabfly1]

Quote from annaland:

Ok, I'll stop.

That's okay. Perhaps our exchange provided some clarification to other respondents who may wish to chime in at some point.

 

[GE2009]

Quote from Gabfly1:

Okay, I have two questions. It is not a challenge. I am genuinely curious.

1. Suppose one of the interrelated markets you follow moves in a meaningful way, by whatever standard you judge as meaningful. Will you get into the other market even before that other market gives you its own setup or signal? Or will you also wait for that other market to generate its own setup or signal before you make your move?

2. Suppose a market gives you a stand-alone setup or signal, even though the interrelated market does not. Will you act on the stand-alone setup or signal, or will you necessarily wait for confirmation from the interrelated market?

Please respond.

I generally wait to see confirmation. It depends on what the market is doing. If gold for example had been ranging, and I see oil ranging as well, and oil breaks the range, and gold looks like it is making a push, I may buy and see if oil can make gold break. I never immediately jump into one market because the other is doing something.

As for the second question. I would act of the stand alone set up. I do not depend on another market to make another one move. They are never 100% correlated. What I mean is that it helps to understand what drives certain moves, and if something were to happen, like Greece getting a bailout, then the Euro would tank, Dollar would surge, and gold would tank. That's happened a lot over the last few weeks. However, just because the Euro breaks to new lows, doesn't always mean gold will, or the Dollar will surge. It is never a first signal, but it gets my attention. The only time I would ever immediately jump into a trade is if, for example, the bulls have gold lets say, and the dollar is making new lows, and the euro just broke resistance or is making new highs, then I would jump into gold because there is a high probability it will move upward.

Hope that clears things up. I never enter a trade just based on other market movements, otherwise I would be over trading.