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Does the gbp/jpy eur/jpy follow the DOW?

  • Post #1
  • Quote
  • First Post: Aug 27, 2007 4:14pm Aug 27, 2007 4:14pm
I notice that when the dow is down alot of the currency crosses are down when the dow rallies the crosses go up. But I do not totally understand the correlation or relation can someone please explain?

CS
gbp/yen yes, strong correlation.
Quoting trader1976
I notice that when the dow is down alot of the currency crosses are down when the dow rallies the crosses go up. But I do not totally understand the correlation or relation can someone please explain?

CS

Its called the famous carry trade: investors borrow yen, i.e sell it to fund stock positions. in the recent subprime storm inverstors unwinded their positions, i.e they sold their stocks because they were afraid and didnt want to hold risky positions and bought back the yen
http://i58.photobucket.com/albums/g2...bpjpyvsdow.png
Is your SL my TP?
I heard seasoned traders say 'follow the dow', but I always keep some dramamine handy

Quoting trader1976
I notice that when the dow is down alot of the currency crosses are down when the dow rallies the crosses go up. But I do not totally understand the correlation or relation can someone please explain?

CS
{Link removed }
There is a good article that better explains what i was going to write at: http://www.investopedia.com/ask/answ...orrelation.asp

Happy trading.
MM

Quoting trader1976
I notice that when the dow is down alot of the currency crosses are down when the dow rallies the crosses go up. But I do not totally understand the correlation or relation can someone please explain?

CS
The greatest achievements are those that benefit others....
kenmania:

Thanks for the chart...
Quoting mmbmusa
There is a good article that better explains what i was going to write at: http://www.investopedia.com/ask/answ...orrelation.asp

Happy trading.
MM
Just wanted to thank you for the link...exactly what I have been looking for
  • Post #9
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  • Last Post: Dec 21, 2007 3:46am Dec 21, 2007 3:46am
  •  FxChi
  • | Joined Dec 2007 | Status: Cash Rules Everything Around Me | 718 Posts
Thanks for the chart. That's really an interesting piece of information. Next question - the pair seems to move more during the Europe session. Let's say the DOW closes -200 points, does G/J appear bearish during the American session, and then even more bearish European session (and this is generally speaking, I know there's no absolutes in FOREX)?
"Wishful thinking dies hard." Igor T.
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