Do currency pairs affect each other ?
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Thread: Do currency pairs affect each other ?

  1. #1
    I'm convinced there's an obvious response. Let's say EUR/USD, what monies are affected by, for instance, if you are trading.

    Is it feasible to forecast the moves of other monies based on a single currency pair's price actions. Certainly if the dollar strengthens against the Euro then it strengthens against other currencies too? If the risk of one allows is this a workable way to exchange whenever is a strong trend in play as on Friday using the EUR/USD?

  2. #2
    You are completely correct, there is undoubtedly a connection between monies. By way of example, if EUR/USD reinforces, USD/CHF will weaken to the same degree, and GBP/USD will strenthen also.

    Check this site out, http://www.mataf.net/en/analysis-correlation.htm.

    This will provide you the correlation between monies. Feel free to email, IM, or PM me if you've any queries.

  3. #3
    Pip Daddy,


    Thanks for the site link, that looks Intriguing. I'm not able risk-wise to exchange multiple currency pairs but it looks like a egy for those with large accounts

  4. #4
    If the majors begin to move the USDCAD could be slow to react I have noticed. 50 percent of the time it will follow the remainder of the market. But it does not. It's where it gets the loonie tag? It is a bit of a gamble but it's usually great for a few pips.

  5. #5
    Quote Originally Posted by ;
    I have noticed in case the majors start to move the USDCAD can be slow to respond. 50 percent of the time that it will follow the remainder of the marketplace. But sometimes it doesn't. Perhaps it's where it gets the label that is loonie? It is a tiny gamble but it's usually great for some exciting pips.
    It is slow to respond for a particular reason. You should be aware of the fundamentals for every currency pair. For instance, let's say you turn on the news channel and you also hear two thing: 1). The riots 2. Oil barrel price rising.

    Away from the course the French riots is bearish for the EUR, so there's a good chance that the EUR/USD will be falling. But because the EUR/USD is currently falling doesn't indie the USD/CAD will rise.

    Oil cost is up which is extremely great for Canada since they're pretty much North America's version of Saudi Arabia and export a hella lot of petroleum. If oil price is going up, that's great for Canada, and bad for US (since they import 70 percent of the oil).

    Factor in news and see whether its country specific. you will probably see fall now if its US specific such as the Fed likely to increase interest rates and USD/CAD shoot up like a rocket at the same rate.

  6. #6
    Quote Originally Posted by ;
    ,


    Thank you for the site link, that seems fascinating. I am not in a position risk-wise to trade several currency pairs however but it looks like a workable egy for those who have big enough accounts
    The most important reason why you should be conscious of money correlations is so you know that your real risk exposure.

    Most novice traders can exchange several pairs at once like shorting EUR/USD and GBP/USD while going long on USD/CHF not knowing they have basically tripled their risk.

  7. #7
    [quote=Pip Daddy It's slow to react for a certain reason. You ought to be aware of the fundamentals for every currency pair. For instance, let us say you flip on the news channel and you hear two thing: 1. The riots 2. Oil barrel price rising. QUOTE]

    I base it on all the majors. If there's all round USD power for an open that the CAD can often be found to be sitting idle a there is a fantastic chance it will follow suit. It's not 100 percent since, as you say, the cad could possibly be powerful for which ever reason but it is going to react and pips can be made. Illues that some currencies can be influenced by other people. . .that's all, well, so I thought.

  8. #8
    Instead of trading pairs in a strong move like the one we are living, it is always more profitable to find the link and trade components.



    Quote Originally Posted by ;
    The main reason you need to know about money correlations is so you know your real risk exposure.

    Most novice traders can exchange several pairs at the same time like shorting EUR/USD and GBP/USD while going long on USD/CHF not understanding they have basically tripled their risk.

  9. #9
    See the thread I enticed to start a little while back here:

    https://www.cliqforex.com/trading-sy...boost-yen.html

    It contains a great article on this topic.

    I'm trading (mainly) cable, entrances using 5 and 1 min charts.

    I've up overlaping 5 min charts on a single screen of cable, EUR and CHF. I always watch carefully another two pairs, just ahead of entry, especially if they are all at a S/R level. If CHF breaks contrary to my cable entry, I will not take it, at least for a recheck of this circumstance.

    If there's a thrust candle on a single pair, others have a tendency to respond in the same direction. If the dollar thrusts abruptly on a single pair ( 10 pips or longer) it is probably that the others will proceed in the same direction, even if just a few pips.

    Additionally, when all 3 pairs throw simultaneously, I see this as a better signal to prehaps take a break apart than if cable goes by itself.

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