Trading currency correlations profitably

If we can barely recognize and trade the trend in one currency pair, what makes it a good idea to use the information or even trade multiple of the "traditionally" correlated pairs?

The most classic negatively correlated pair is EUR/USD and USD/CHF. Yet that correlation is broken yesterday. EU was already bullish after the 100 pips down movement, yet UF did not turn bearish at all and kept going up instead.

Another classic is all the JPY pairs. When one is down, the other tends to move simultaneously or lag a little. But when all pairs are down, what makes you think that you can trade any of the pair and price will not reverse in all pairs? Yesterday's nasty spike on all the JPY pairs proves that they move simultaneously and there is no advantage of knowing what other JPY pairs are doing. If you're long in any one of them, what correlation information can save you from the spike?

Questions:

 

1. How can you use correlation when every time frame gives you a different correlation data? 5 min correlation is different than hourly, daily, or weekly correlation.
2. How can you use correlation when the correlation itself changes over time? What is considered to be correlated today will not be by next week/month/year.
3. How can you use correlation indicators that simply display up and down arrows of what other currencies are doing? It all depends on the algorithm of course, but what I've seen so far is that they change by minutes and as soon as you see all arrows pointing up or down, under what rational do you think that price will not reverse?

I think currency pairs/commodities/indices/stock/futures are always correlated, but the correlation itself is not tradeable.

I would love to hear from you if you are a profitable correlation trader.

This question pops up regular and ive yet to see responses that suggest some see the huge benefits .

this is a very interesting topic and the core of my trading.

if you look at correlated charts you can see that they dont change as quick as you might imagine.although on intraday they dont match these longer term % of change,but this in its self lies an advantage.

like anything in this game,how much time do you want to discover its idiosyncrasies,

ill elaborate when time permits

The correlation is always perfect if you look at 3 pairs instead of 2
eur/gbp is a product of eur/usd and gbp/usd - if eur/usd goes up but gbp/usd goes down, what does that tell you about eur/gbp?
You should be able to know what any pair is doing without even looking at it, just compare the two currencies against a third.
I trade relative strength profitably, the key is to think about individual currencies rather than currency pairs.
Always buy the currency you feel is currently the strongest, always sell the currency you feel is the weakest.

JPY pairs. They move in sync, harmony.
So, you are actually trading JPY`s weakness or strenght.
Sometimes big news gives freebies, everyone else is moving, and one pair is not, or moving in "wrong direction", like CAD-JPY last NFP.
Put EMA 10, 20, 50 and 200, and RSI 14, levels 30,70, daily.
When trending, BigBoy`s are reloading around 10 EMA, daily.
Buying selling in trend, change to H1, you`ll see.

I have modified someone`s indicator, that will show EUR strenght/weakness,
maybe I will post that later.

Line Centre 33 in USD-CHF H1 is good.

This should show correlations.
EURUSD---GBPUSD---EURGBP
EURUSD---EURAUD---AUDUSD
EURUSD---USDCHF
maybe bollinger with high deviation, 3 or so
whit this one is good.
It is not mine indicator, I just modified it.

Using BB something like this. M5
GU and EG outside BB and EU in the middle.

Here is close and sell.
Looks good?

Here is mirror-yen pairs.
Not mine indicator, I just modified it.