How To Trade Forex Using Correlations Between Currency Pairs
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Master Full Investment
Forex correlations help traders understand how currency pairs move in relation to each other. Here’s how to use them:
Identify Correlated Pairs
Some pairs move in the same direction (positive correlation), like EUR/USD and GBP/USD. Others move in opposite directions (negative correlation), like EUR/USD and USD/CHF.
Avoid Overexposure
Don’t trade multiple pairs that are highly correlated in the same direction—it increases risk.
Hedge Risk
Use negatively correla