Profitability of the Forex Correlation indicators system
The first and most important indicator for any trading system is profitability. The author of FX Correlation indicators shows on his site the monitoring of MyFxbook, which confirms that you can get very good trading results with this manual strategy for Trading on correlation. See for yourself – this strategy brought almost + 700% profit. This is a rapid growth of the deposit, which will be a pleasure to watch on your trading account for every trader.
If you don’t know what Correlated currencies are and what correlation trading is, then you can read more detailed descriptions on Wikipedia.
![Correlation Trader myfxbook](https://robomarket.io/wp-content/uploads/2023/03/Correlation-Trader-myfxbook.webp)
Key Features of Correlation FX system
- Assets for trading (Correlated currencies) – any (currency pairs, gold and other metals + goods, cryptocurrencies, stock indices and other financial assets).
- Timeframe for trading – M15, H1 or H4. However, remember – the smaller the time frame for trading, the more often you will receive trading signals for Trading on correlation.
- Trading on correlation
System signals are not redrawn. - The minimum capital to start is from $100
- Leverage: any
- Broker for trading – any
- Trading functions – there is a panel for opening and closing trades
Developer site – here
![](https://robomarket.io/wp-content/uploads/2023/03/Correlation-Trader-system-1024x587.webp)
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How does the Forex Correlation strategy work?
With the ability to compare price correlations across three instruments simultaneously, this indicator is an incredibly versatile tool. Although initially designed for currency pair correlations, it can also be used for stocks, commodities, and crypto currencies (provided they are offered on MT4 by your broker). The only requirement is that each instrument (Correlated currencies) must belong to the same exchange, ensuring that their trading hours align.
Thanks to its adaptability, this Forex Correlation indicator can facilitate a wide range of trading strategies, from scalping and hedging to simple trend-following. One such strategy involves analyzing the average trend direction of two or three currency pairs, while another involves identifying when all three pairs correlate on the same side of a given moving average. Crucially, the indicator applies the same moving average settings to all three correlation pairs on the same time frame, ensuring that the correlations remain consistent.
![](https://robomarket.io/wp-content/uploads/2023/01/mobile-app2.webp)
![Forex Correlation indicator](https://robomarket.io/wp-content/uploads/2023/03/Histogram-with-Correlation-trading-1024x632.png)
![system Correlation Trader strategy](https://robomarket.io/wp-content/uploads/2023/03/system-Correlation-Trader-strategy-1024x523.png)
![Correlation FX myfxbook](https://robomarket.io/wp-content/uploads/2023/03/Correlation-Trader-strategy-myfxbook-1024x602.png)
![Trading on correlation](https://robomarket.io/wp-content/uploads/2023/03/Correlation-Trader-strategy-1024x601.png)
This Forex Correlation indicators system implements several strategies at once. Trading with the trend and against the trend, scalping and long-term positional trades. All this will become available to you after purchasing this system for trading on correlated assets.
A little more about Trading on correlation
To become a proficient trader, it's crucial to grasp how your entire portfolio reacts to market fluctuations, especially in the forex market. This importance stems from the fact that currencies are traded in pairs, meaning no pair operates in isolation. Recognizing these correlations and their changes can help manage your portfolio's overall risk exposure.
- Key Points: Correlation is a statistical tool that measures the relationship between two variables. A high correlation coefficient indicates a strong alignment. A positive correlation means both variables move in the same direction, whereas a negative correlation means they move in opposite directions. In forex trading, understanding correlation helps predict movements in currency pair rates that are likely to occur together. Currencies that are negatively correlated can be used strategically for hedging.
- Understanding Correlation: The interconnected nature of currency pairs is evident because trading one pair often indirectly involves others. For instance, if you trade the GBP/JPY, you're inherently dealing with the GBP/USD and USD/JPY pairs due to their intertwined relationships. These connections go beyond mere pairing, with movements often reflecting complex economic forces.
- The Dynamics of Correlation: Correlations FX are not static; they vary due to numerous factors, including changes in market sentiment, global economic shifts, and distinct monetary policies. Analyzing six-month trailing correlations can provide a clearer view of the relationship dynamics between pairs, offering more precise insights than shorter-term analyses.
- Calculating Correlations trading Yourself: To actively monitor the strength and direction of your currency correlations, consider calculating them using software or spreadsheet programs like Microsoft Excel. Simply download historical price data, and use Excel’s correlation function to determine the degree of correlation over your desired timeframe.
- Trading with Correlations: Knowledge of correlations FX can prevent counterproductive trading decisions, such as taking positions in currency pairs that counteract each other. For instance, if EUR/USD and USD/CHF typically move inversely, it is unproductive to hold long positions in both. Alternatively, diversifying with slightly correlated pairs, like EUR/USD and AUD/USD, can lower risk while maintaining a consistent market stance.
Using different pip values for pairs with strong negative correlations, like EUR/USD and USD/CHF, can also serve as an effective hedging strategy. If the EUR/USD rises, causing a loss, the USD/CHF is likely to gain, offsetting the loss due to their inverse relationship.
- The Bottom Line: Effective correlation trading hinges on understanding how currency pairs correlate, which influences their collective movement. Whether your strategy aims to diversify, hedge, or enhance positions, staying informed about these correlations is indispensable. By doing so, traders can better manage their portfolios and potentially increase their market success.