Trading correlation pairs by using the other pairs

Full View.....we are in RISK-ON SENTIMENT......

AJ 1H

Achf 1H

NY Session is coming.....for all London Session Risk-ON was the rule.....It will be also in NY Session? We will see....

Probably not....

Mmhhh USD , CHF, JPY & GOLD are SAFE HAVEN GOODS they are directly correlated........ during RISK-ON they go DOWN, during RISK OFF they go UP

So IMHO it's not a good idea

It wasn't a good idea. it was a great idea.

MAJOR PAIRS

The GBP/CAD is the pairing of the British pound and the Canadian dollar. This pair is most active during the euro and U.S. sessions. Some notable news releases affecting the pair include the Bank of Canada rate decision and Ivey purchasing managers index as well as the UK trade balance and consumer price index.

PAIRS THAT CORRELATE:
GBP/NZD, AUD/NZD, GBP/USD (CROSS)

The GBP/CHF is the pairing of the British pound and the Swiss franc. As a safe-haven currency, the franc is subject to movement during times of social and geopolitical unrest. Some notable news releases affecting the pair include the Swiss National Bank monetary policy assessment and consumer price index as well as the UK trade balance and retail sales.


PAIRS THAT CORRELATE:
CAD/JPY, CHF/JPY, EUR/JPY (CROSS)

Gold was the main reason all these pairs were successful,
they all correlated together
Every single one of us should have a gold chart and a silver chart on our platforms,

Attached Image (click to enlarge)

If you got a gold chart on your platform,
You can use it as a supporting indication
of which way the pairs are going to trade.

Gold has a negative correlation with USD/CHF.

Gold has a positive correlation with AUD/USD.

Attached Image

Oil has a negative correlation with USD/CAD of about 93% between 2016 through 2000

What is the current gold-silver ratio?


Since 2011, when the silver price peaked, the ratio has more than doubled.
In April 2011 an ounce of gold was worth around 31 times more than an ounce of silver,
As of February 2016 that ratio has reached almost 80: 1.

Gold's positive correlation with CHF

Switzerland's currency, the Swiss franc, also has a strong link with gold.
The reason why the Swiss franc (CHF) moves along with gold is that 25% of Switzerland's money is backed by gold reserves.
When gold goes up, CHF goes up. When gold goes down, CHF goes down.

MAJOR PAIRS

The GBP/JPY is the pairing of the British pound and the Japanese yen. Also known as the “gopher” or “geppy,” the GBP/JPY is extremely volatile and can move up to 350 pips in a single trading day.

PAIRS THAT CORRELATE:
CAD/JPY, AUD/JPY, CHF/JPY (CROSS)

The NZD/JPY is the pairing of the New Zealand dollar and the Japanese yen. The difference in interest rates between NZD and JPY makes NZD/JPY a popular pair to “carry trade.” A carry trade involves buying a currency with a high-interest rate in hopes of earning profit off the daily swap payments (although losses are certainly possible).

XAG/USD GOLD

XAU/USD conveys the value of gold compared to the United States dollar. Savvy traders can attempt to profi t from
fluctuations in the price of metals or use these instruments as a safeguard against inflation or commodity pairs.

How to use correlation to trade Forex.
Part 1
First, they can help you avoid entering two positions that cancel each other out
for instance by knowing that the EURUSD AND USDCHF move in opposite directions Nearly 100% of the time,
You would see that having a portfolio long EURUSD and long USDCHF Is the same as having virtually no position because as the correlation indicates, when EURUSD Rallies, USDCHF will undergo a sell-off.
On the other hand, holding long EURUSD and long AUDUSD or NZDUSD Is similar to doubling up on the same position since the correlations are so strong.

How to use correlation to trade Forex.

part 2
Diversification is another factor to consider since the EURUSD the and AUDUSD Correlation is traditionally not 100% positive, Traders can use these two pairs to diversify their risk somewhat while still maintaining a call directional view, for example, to express a bearish Outlook on the USD, The Trader instead of buying two lots of the EURUSD may buy one lot of the EURUSD and one lot of AUDUSD, Imperfect correlation between the two different currency pairs allows for one more diversification and marginally lower risk furthermore the Central Bank of Australia and Europe have different monetary policy biases, So in the event of the dollar rally,
the Australian dollar may be less affected than the EURO, or vice versa.

up and running.