Helping check correlation trading


Helping check correlation trading
The correlation is very animated in forex trading. It is easy to check what pair has high correlation with other or low relationship. There are many way to use correlation in trading but we recommend 2 significant rules:
- Never buy 2 pairs have high  POSITIVE correlation to avoid double exposure. In the below table correlation you easily see AUDCHF and AUDJPY what has 84.3% positive correlation. That means if you buy or sell both AUDCHF and AUDJPY, the risk will be most double if you are wrong.

- Never buy 2 pairs have high  NEGATIVE correlation to avoid unnecessary hedging. In the correlation table above, You could see AUDUSD and USDCAD has -90% negative correlation that mean if you buy AUDUSD and buy USDCAD you won’t have chance to have profit for that trade.
We also highly commend trader should check the trend of these pair have high positive correlation with our Trend Heat map as confirm the signal before you decide any trading strategy. From the relationship table above  You might find out CHFJPY and EURJPY has 75.8% correlation so when you check the trend you should go to our trend heat map. Special when the trend change to new direction, you could wait for the other pair trend confirm it. It is convenient to check real time the correlation table at www.myfxbook.com/en/forex-market/correlation


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