Trading forex correlating pairs
Correlations between pairs can be strong or weak and last for weeks, months, or even years.
But always know that they can change on dime. Staying up-to-date with currency correlations can help you make better decisions if you want to leverage, hedge or diversify your trades. Coefficients are calculated using daily closing prices.
Currensee Correlation | OANDA
Positive coefficients indicate that the two currency pairs are positively correlated, meaning they generally move in the same direction. Negative coefficients indicate that the two currency pairs are negatively correlated, meaning they generally move in the opposite directions.
Correlations can be used to hedge, diversity, leverage up positions, and keep you out of positions that might cancel each other out. Just make sure you have rules in place when you traded correlated pairs and always stick to your risk management rules!
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