Ashiran | Forex Correlation Eng
Forex Correlation Eng

How to Read a Forex Correlation Table

 

1. Identify the Currency Pairs:

  • Rows and columns represent different currency pairs (e.g., EUR/USD, GBP/USD).

2. Understand the Correlation Values:

  • +1: Perfect positive correlation (pairs move together).
  • -1: Perfect negative correlation (pairs move in opposite directions).
  • 0: No correlation (random movement).

3. Focus on High Correlations:

  • Values close to +1 or -1 are more significant.
  • Use them to avoid overexposure or hedge risk.

4. Use Colors for Quick Insights:

  • Green: Positive correlation (e.g., 0.85 means pairs move together).
  • Red: Negative correlation (e.g., -0.75 means pairs move in opposite directions).

5. Choose Based on Your Strategy:

  • Day traders may prefer short-term correlations.
  • Swing traders may use longer-term data.

Example: If EUR/USD and GBP/USD have a correlation of 0.90, it means they often move together. Avoid opening positions in both to limit risk.

 

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Currency AUDUSD EURUSD GBPUSD NZDUSD USDCAD USDCHF USDJPY
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