Utility

Currency Strength Indicator

Correlation Ranking Heat Map is the Currency Strength indicator based on Correlation anlaysis. Correlation Ranking Heat Map calculates the cross correlation of all possible combination of entire market data. Then after, you can use these useful relationship among symbols to identify the potential market direction of any symbol you want. Yet, the rigorous calculation is done at the background. For your trading, you just need to press few buttons to bring the essential information for your trading.

Then how do we use the cross correlation to find out the trend or trend strength of each symbol. Correlation basically find out the relationship or co-movement of two or more symbols. When they are highly correlated, we can group these similar behaving symbols in one basket. What does this mean for your trading ?

To explain in layman’s term, say that, John is first year student in the Aspire Primary School. Now, you know that Mary, also another first year student in the Aspire Primary School, is going to picnic to Disney land tomorrow. Then without even asking to John, we can guess or predict that John is also in the group going to Disney land tomorrow.

Of course, the chance of John joining to the picnic group is subject to some probability because he might be sick on the day. But still, the chance of John joining to the picnic group is higher than not. In summary, correlation helps us to predict the behavior of individual.

This is the underlying idea behind this Correlation Matrix Based Trend Indicator. Instead of looking at one symbol, you are looking at multiple of highly related symbols to find out their trading direction.

Considering most of technical indicator is calculated on one symbol data, this correlation strategy utilizes multiple of symbol data to find out more accurate trend direction than typical technical indicator. In correlation ranking heat map, we do not mix it up with other lagging indicator but we just make the direct use of price movement itself in deciding trend direction. So the strategy is also partly related to the price action across multiple symbols.

Main Features of Correlation Strength Indicator

Correlation Ranking Heat Map provide the following features and many more:

  • Heat Map by Symbol
  • Heat Map by Ranking
  • Heat Map by Magnitude
  • Correlation Matrix for all symbols
  • Standard Deviation for all symbols
  • Correlated Group Lookup feature for each heat map ( this is the most powerful feature for your trading)
  • Paid version comes with fast MetaTrader Connectivity for any custom symbols for either MetaTrader 4 or MetaTrader 5

Potential Benefit of Correlation Ranking Heat Map

  • Easy and simple graphical representation of trend strength of overall market
  • Easy and simple graphical representation of trend strength of correlated group
  • Prediction of trading direction for individual symbol from correlated group
  • This is also helpful for the portfolio Construction or portfolio trading

How to Get Correlation Ranking Heat Map

We do not provide the MetaTrader version of Correlation Ranking Heat Map. Correlation Ranking Heat Map is only available on our Optimum Chart Exclusively. Check out our Optimum Chart page below:

https://algotrading-investment.com/2019/07/23/optimum-chart/

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