Summary: Currency Correlations
Some currency pairings move in lockstep, much like synchronised swimmers. Other currency pairings travel in opposite directions, like magnets with the same poles that contact.
How To Calculate Currency Correlations With Excel
Correlations will vary and alter over time, as you've read. As a result, keeping track of current coefficient strengths and directions becomes even more critical.
Be Careful! Currency Correlations Change!
The FX market is like a schizophrenic patient with bipolar disease who eats chocolates all day, has severe sugar highs, and has erratic mood swings all day.
5 Reasons Why Factoring In Currency Correlations Help You Trade Better
Over time, currency correlation informs us whether two currency pairings move in the same, opposing, or completely random directions. It's vital to remember when trading currencies that because they're exchanged in pairs, no one currency pair is ever completely isolated.
Are You Doubling Your Risk Without Knowing It?
When trading numerous currency pairings in your trading account at the same time, always be conscious of your RISK EXPOSURE.
How To Read Currency Correlation Tables
Over various time frames, each table depicts the connection between each primary currency pair (in orange) and other currency pairings (in white). Remember that currency correlation is expressed as a correlation coefficient, which is essentially a number between -1.00 and +1.00 in decimal notation.
Currency Correlation Explained
Have you ever observed that while one currency pair rises, another one falls? What if, as a result of that identical currency pair falling, another currency pair appears to be copying it and falls as well?
Scaling In and Out of Trades in Context
Let's see how much of this data has made its way into your brain. Here's a quick review of the guidelines for scaling in and out of trades safely.
What Can You Do To Improve Your Winning Positions?
Scaling into a trending move is a fantastic transaction modification to increase your maximum profit. We can't all be like DJ Khaled, who wins every time, so there are guidelines you should follow to ensure that you add value to your open positions.
What Is The Best Way To Scale In Positions?
We spoke about how to scale OUT of a trade in the last lesson. Now we'll demonstrate how to scale WITHIN a trade. When your trade is going against you, the first scenario we'll go over is adding to your positions.
How to Scale Your Way Out of Tough Situations
Scaling out, as already said, has the clear advantage of bringing down hazard by removing exposure to the market whether you're in a winning or losing position.
Changing Positions By Scaling In And Out
Now that you know how to set proper stops and identify the best position size, here's a lesson on how to get creative in your trading.
Setting Stops in Context
Let's go through all you need to know about stop losses now.
When Using Stop Loss Orders, There Are 3 Rules To Follow
After you've done your study and crafted an outstanding trading strategy with a stop-out level, you must now ensure that you execute those stops if the market moves against you.
4 Big Mistakes Traders Make When Setting Stops
Let's look at the four most common blunders traders make when it comes to applying stop losses. We frequently highlight the need of risk management, but if done incorrectly, it can result in more losses than victories.
How To Set A Stop Loss Based On Price Volatility
If you move to a general term, the volatility is the amount that the market can potentially move within a certain time. If you know how much the currency pair tends to move, you can establish the correct stop loss level and avoid early extraction from random price fluctuations.
How To Set A Stop Loss Based On A Time Limit
Time stops will be stops you set in view of a predetermined time on a trade.
How To Set A Stop Loss Based On Support And Resistance From Charts
A smarter way to determine stops is based on what the chart says. We trade markets, so we may stop based on what the market is showing us.
Setting A Stop Loss Based On A Percentage Of Your Account
Let's begin with the most fundamental sort of stop loss: the percentage-based stop loss. The percentage-based stop employs a portion of the trader's money that is predefined.
What is a Stop Loss and how does it work?
The most important obligation you have as a trader is to manage and safeguard your trading capital.
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