• Lesson 33: Currency Correlation Explained

Have you ever noticed that when a certain currency pair rises, another currency pair falls?

• Lesson 34: How To Read Currency Correlation Tables

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Currency correlation tells us whether two currency pairs move in the same, opposite, or totally random direction, over some period of time. When trading currencies, it’s important to remember that since currencies are traded in pairs, that no single currency pair is ever totally isolated. Correlation is computed into what is known as the correlation coefficient, which ranges between -1 and +1. Here is a guide for interpreting the different currency correlation coefficient values.

• Lesson 37: Be Careful! Currency Correlations Change!

The forex market is like a schizophrenic patient suffering from bipolar disorder who constantly eats chocolates, experiences extreme sugar highs, and has volatile mood swings all day long. We’re not even exaggerating. Although currency correlations between currency pairs can be strong or weak for days, weeks, months, or even years, they do eventually change and can change when you least expect it. The strong currency correlations you see this month may be totally different next month.

• Lesson 38: How To Calculate Currency Correlations With Excel

As you’ve read, correlations will shift and change over time. So keeping on top of current coefficient strengths and direction becomes even more important. Lucky for you, currency correlations can be calculated in the comfort of your own home, just you and your most favorite spreadsheet application. For our explanation, we’re using Microsoft Excel, but any software that utilizes a correlation formula will work.

• Lesson 39: Summary: Currency Correlations

As you’ve read, correlations will shift and change over time. So keeping on top of current coefficient strengths and direction becomes even more important. Lucky for you, currency correlations can be calculated in the comfort of your own home, just you and your most favorite spreadsheet application. For our explanation, we’re using Microsoft Excel, but any software that utilizes a correlation formula will work.