How important is correlation in trading | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

MT4 MTF Correlation table and Correlation oscillator indicators 155 replies

Correlation Between Trading Time and Technical Trading Success 1 reply

Correlation trading 90 replies

trading Eur/Gbp based on E/U x G/U correlation 9 replies

Correlation/Price Crossings Trading Tips? 3 replies

How important is correlation in trading

  • #1
  • First Post: Feb 21, 2014 2:32pm Feb 21, 2014 2:32pm
Hello fellow traders,how important is correlation in your trading?
  • #2
  • Feb 21, 2014 8:34pm Feb 21, 2014 8:34pm
Tedge, this is a fairly broad statement and not exactly sure what context you are coming at it however for me it's fairly important in one of the strategies I trade which calls for hedging across 2 tightly correlated pairs in opposite directions
  • #3
  • Feb 23, 2014 8:46pm Feb 23, 2014 8:46pm
Quoting yazzie
Tedge, this is a fairly broad statement and not exactly sure what context you are coming at it however for me it's fairly important in one of the strategies I trade which calls for hedging across 2 tightly correlated pairs in opposite directions

if you do it, right. you are out of the market, just paid the spread.


I am not sure you can arbitrage the roll over rates, given the spread and negative rate on the other currency.

why not just stay out?
AVT INVENIAM VIAM AVT FACIAM
  • #4
  • Feb 23, 2014 8:48pm Feb 23, 2014 8:48pm
my bad, I read your statement wrong you are taking calls, am not familiar with option strategies so I would just be speaking out of ignorance.
AVT INVENIAM VIAM AVT FACIAM
  • #5
  • Feb 25, 2014 5:57pm Feb 25, 2014 5:57pm
If CAD goes down, and CHF goes up..does CAD/CHF go up or down?..
  • #6
  • Feb 25, 2014 6:00pm Feb 25, 2014 6:00pm
Quoting SaiLyfee
If CAD goes down, and CHF goes up..does CAD/CHF go up or down?..

im not sure if I'm correct but wouldn't this be the cause of ranging markets?
He who knows when he can fight and when he cannot, will be victorious.
  • #7
  • Feb 25, 2014 6:03pm Feb 25, 2014 6:03pm
Quoting SaiLyfee
If CAD goes down, and CHF goes up..does CAD/CHF go up or down?..
If CAD was moving down and CHF was going up and there weren't major price moving speculators betting strictly on the CAD/CHF to go up, then under normal conditions CAD/CHF would go down. It's all about the order/transaction flow.
  • #8
  • Feb 25, 2014 6:13pm Feb 25, 2014 6:13pm
Quoting FXMasterSK
{quote} If CAD was moving down and CHF was going up and there weren't major price moving speculators betting strictly on the CAD/CHF to go up, then under normal conditions CAD/CHF would go down. It's all about the order/transaction flow.
Ah I see, okay then, thank you. I guess the possibility still exists for CAD/CHF to go up despite CAD going down and CHF going up given there was enough interest in the pair..
  • #9
  • Feb 25, 2014 6:30pm Feb 25, 2014 6:30pm
Quoting SaiLyfee
{quote} Ah I see, okay then, thank you. I guess the possibility still exists for CAD/CHF to go up despite CAD going down and CHF going up given there was enough interest in the pair..
Yep small possibility, but I it could happen. Those speculators buying CAD against CHF could also affect USD/CAD and USD/CHF prices with their orders on USD/CHF. Markets are so complex yet work so simple lol.

Good luck!
  • #10
  • Last Post: Feb 25, 2014 6:41pm Feb 25, 2014 6:41pm
Quoting FXMasterSK
{quote} Yep small possibility, but I it could happen. Those speculators buying CAD against CHF could also affect USD/CAD and USD/CHF prices with their orders on USD/CHF. Markets are so complex yet work so simple lol. Good luck!
Ah yes, it all makes sense now. Thank you
0 traders viewing now