Indices - stocks correlation. How to trade?
- Thread starter Leopard9
- Start date
I am wondering where did you get those correlations from ?
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Well if tek stocks tend to follow QQQ 75%[not exact number]; that means you may do average if you are a slave to QQQ when trading tek stocks. I do like to consider QQQ...... for entry, but not so much on exit .O f course with commisons + slippage,,avarage become$ below average; but nothing here is a prediction .Good question,L9
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Well if tek stocks tend to follow QQQ 75%[not exact number]; that means you may do average if you are a slave to QQQ when trading tek stocks. I do like to consider QQQ...... for entry, but not so much on exit .O f course with commisons + slippage,,avarage become$ below average; but nothing here is a prediction .Good question,L9
Thanks for your imput, very helpfull too! QQQ provides better signals than nasdaq?
Im looking at QQQ right now and it seems to show less noise wich is a good thing. Is that why you prefer it to nasdaq? My strategy is buying momentum and roll stop imediatelly a little above entry point. On IB with low commissions, even if the stock turns against me minutes later the worst that can happen is a 4/5 dollar profit. Loss is unlikely unless entry is poor. Thats why I decided to ask 
I calculated them. First I downloaded a list of the daily close for each ETF for the past 6 months, then calculated the daily percentage change, then for each pair of ETFs, I ran the lists of percentage changes through the Pearson Correlation algorithm. Sounds complicated, but I have written programs that can perform the correlation for any given set of stock symbols in about 2 seconds.
%%Im looking at QQQ right now and it seems to show less noise wich is a good thing. Is that why you prefer it to nasdaq? My strategy is buying momentum and roll stop imediatelly a little above entry point. On IB with low commissions, even if the stock turns against me minutes later the worst that can happen is a 4/5 dollar profit. Loss is unlikely unless entry is poor. Thats why I decided to ask
Yes ; that + tends to trend better up. NOT a prediction.
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Yes ; that + tends to trend better up. NOT a prediction.
You are the man
Thanks a bunchI think you guys may have got incorrect information. Stocks, commodity, indexes, currencies all have positive correlation between them. The degree of corr however, depends on how much share big hedge funds have in each asset category.
Most of them are not driven by fundamentals. They are mostly driven by noise trading. If you try to trade on fundamentals, you will lose all your money eventually.
Most of them are not driven by fundamentals. They are mostly driven by noise trading. If you try to trade on fundamentals, you will lose all your money eventually.
So
Sorry man. A lot of people start with this idea and tend to be over optimistic, thinking what a lot of unproven books tell you will work. The reality is different. You will lose most likely because eventually luck will run out unless you have fig out how hedge funds drive prices.
Im looking at QQQ right now and it seems to show less noise wich is a good thing. Is that why you prefer it to nasdaq? My strategy is buying momentum and roll stop imediatelly a little above entry point. On IB with low commissions, even if the stock turns against me minutes later the worst that can happen is a 4/5 dollar profit. Loss is unlikely unless entry is poor. Thats why I decided to ask
Sorry man. A lot of people start with this idea and tend to be over optimistic, thinking what a lot of unproven books tell you will work. The reality is different. You will lose most likely because eventually luck will run out unless you have fig out how hedge funds drive prices.