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Currency Correlations

Have you ever noticed that when a certain currency pair rises, another currency pair falls? Somehow, they're all connected.

Lessons on Currency Correlations

1. What is Currency Correlation?

Simply put, currency correlation tells us whether two currency pairs move in the same, opposite, or totally random directions.

2. How to Read Currency Correlation Tables

Take a look at the strength (or weakness) of correlations between the most popular currency pairs over various time frames!

3. Always Know Your Risk Exposure

When you are simultaneously trading multiple currency pairs in your trading account, you should always make sure that you're aware of your total risk exposure.

You're probably wondering how using currency correlations can improve your trading. Well, wonder no more because we know the answer!

5. Know that Currency Correlations Change

Although correlations between currency pairs are strong (or weak) for days, weeks, months, or even years, they may eventually change--sometimes when you least expect it!

6. DIY - Calculating Currency Correlations using Excel

You can calculate currency correlations in the comfort of your own home with your favorite spreadsheet application. We'll teach you how.

7. Summary: Currency Correlations

Like synchronized swimmers, some currency pairs move in tandem with each other. And like magnets of the same poles, other currency pairs move in opposite directions.

"Opportunities multiply as they are seized."
Sun Tzu