Eur/usd Usd/chf

These two currency pairs are opposites in trading direction why could'nt you trade both pairs going in opposite directions using whatever indicators you use for entry/exit to confirm each other? I have looked @ the 15 min,1hr,4hr daily,weekly and they match up.Would like to here some feedback on this !!!

The long term correlation between these two pairs is around -90 which means they do the exactly opposite of one another. So if you trade both pairs in opposite directions, you are basically making one trade, just double the risk. Its exactly the same as trading one of them in one direction. Unless I misunderstood what you were saying, there is no benefit in doing that.

Those pair are an inverse of each other, however, they do de-couple from time to time making it very risking to go the opposite direction with each one. Last week, for example, they de-coupled. The EUR/USD was bullish and moving up and the USD/CHF also went bullish and moved up at an even faster degree.

These two pairs are best used as a hedge against losses. So, you wouldn't go opposite directions with them, you'd go the same direction in order to hedge your trades.

Macroeconomic factors, such as balance of payments and interest rates, do determine exchange rates and long-term correlations between currency pairs. You might remember, for example, the times when the rates in US, Europe and Japan were low, there was practically no difference what pair to trade (EURUSD or USDJPY) - they were highly (un)correlated. And now interest rate differential shifts even the strongest historical correlation between USDCHF and EURUSD.
EURUSD vs. USDCHF correlation (period dependence):
http://www.understandmarket.com/imag...usd-usdchf.gif

Play with { Link Removed } for better understanding.

Hey monikroc

Whilst EUR and CHF and 90+ % correlated, some myself included trade USD/CHF as it tends to give you bigger moves. Also, I use technical systems for entry and in my experience you do not always get a signal for a trade on both pairs.