Thinking and Examining Investing Strategies
One recommendation that I have seen quite often is the use of overlayed charts of correlated pairs. The idea is pretty simple: you put the pair (e.g. AUDUSD and NZDUSD) on a single chart. If the charts are at first separate but later joined, you enter a trade with the assumption that the since the are [...]
As discussed in part 1, underlying any correlated pair of currencies, there is a correlating currency that correlate the two in the pair. An example used in part 1 is the pair GBPJPY and USDJPY. They are highly correlated, and the underlying correlating current is GBPUSD. Correlation investing strategy says that you can buy or sell GBPJP [...]
Many years ago I was introduced to the concept of correlation and its use on Forex. I tried it and frankly had some success with it. Basically I picked a pair whose price actions correlated well with each other and trade them simultaneously as if they were one entity. Most of the time the prices [...]