Forex Correlation
Forex correlation refers to the relationship between the price movements of different currency pairs.
Types of Correlation
Forex Correlation Trading vs. General Trading Strategies
Focus on Multiple Currency Pairs
Forex Correlation Trading goes beyond tracking the trends of a single currency pair; instead, it considers the correlation among multiple currency pairs.
Utilizing Interrelationships
Correlation trading leverages the positive or negative relationships between currency pairs. In positive correlation, when one pair rises, the other may also rise, while in negative correlation, the opposite holds true.
Advantages of Forex Correlation Trading:
Trading multiple correlated currency pairs helps diversify risk.
Understanding correlations between different currency pairs provides a more comprehensive market analysis.
Hedging risks by going long on one pair and short on another.
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