6 Secret Currency Technique that Banks use to make Billions

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6. Correlations

Negative as well as positive correlations exist between all currency pairs and are susceptible to change based on a variety of factors, and of course, monetary policy in that country is one of if not the biggest influence. A trader should check the currency pair correlation often to ensure that there have not been any major changes in the way currency pairs are affecting each other.
This can be done in any number of ways; most Forex trading software packages include the ability to view historical and daily currency prices which will allow you to determine a correlation between currency pairs. In closing, I highly recommend that if you trade currency you become familiar with the Correlation Coefficient between currency pairs to hedge your positions and limit your market exposure for maximum profit.

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