Hello.
I wanted to know the approach that traders on this forum take. Lets say that EUR/USD is in a strong bearish movement and you get a sell signal on another instrument that has inverse correlation, meaning that when EUR/USD goes down this other instrument should go up. Do you still take the signal? How do you deal with the correlation/ inverse-correlation of instruments?
I always thought that traders should only trade one instrument at a time. Because when your in a trade and have a position in multiple instruments its a mess since one instrument can be going up while the other is going down (Inverse). Both could be going up or down (Correlation) - but you are just adding on to risk.
How do you deal with this, or how should I go about it?
I wanted to know the approach that traders on this forum take. Lets say that EUR/USD is in a strong bearish movement and you get a sell signal on another instrument that has inverse correlation, meaning that when EUR/USD goes down this other instrument should go up. Do you still take the signal? How do you deal with the correlation/ inverse-correlation of instruments?
I always thought that traders should only trade one instrument at a time. Because when your in a trade and have a position in multiple instruments its a mess since one instrument can be going up while the other is going down (Inverse). Both could be going up or down (Correlation) - but you are just adding on to risk.
How do you deal with this, or how should I go about it?