Correlations are somewhat of a misnomer. The correlation equation only looks at correlation for a given period of time. There is an assumption that pairs move in or out of correlation, they snap back. That is true sometimes, but many times they pull apart and stay a part, sometime forever.
Because of that, I look at baskets of trades and correlations are just one aspect. they other is overlaying profit and price action, Creating Extreme Centers of gravity and always trade in the direction of the basket trend.
Because of that, I look at baskets of trades and correlations are just one aspect. they other is overlaying profit and price action, Creating Extreme Centers of gravity and always trade in the direction of the basket trend.
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