How To Calculate Currency Correlations With Excel

As you’ve read, correlations will shift and change over time. So keeping on top of current coefficient strengths and direction becomes even more important. Lucky for you, currency correlations can be calculated in the comfort of your own home, just you and your most favorite spreadsheet application. For our explanation, we’re using Microsoft Excel, but any […]

Be Careful! Currency Correlations Change!

The forex market is like a schizophrenic patient suffering from bipolar disorder who constantly eats chocolates, experiences extreme sugar highs, and has volatile mood swings all day long. We’re not even exaggerating.   Although currency correlations between currency pairs can be strong or weak for days, weeks, months, or even years, they do eventually change and can change when […]

5 Reasons Why Factoring In Currency Correlations Help You Trade Better

Currency correlation tells us whether two currency pairs move in the same, opposite, or totally random direction, over some period of time. When trading currencies, it’s important to remember that since currencies are traded in pairs, that no single currency pair is ever totally isolated.   Correlation is computed into what is known as the correlation coefficient, […]

Are You Doubling Your Risk Without Knowing It?

When you are simultaneously trading multiple currency pairs in your trading account, always make sure you’re aware of your RISK EXPOSURE. For example, on most occasions, trading AUD/USD and NZD/USD are essentially like having two identical trades open because they usually have a positive correlation. You might believe that you’re spreading or diversifying your risk by trading in different pairs, […]