While trading price action and patterns on the charts can alone be quite profitable. However, in this post I hope to stress the importance at looking at more than one chart and understanding the correlation between assets.
There are many cases in which foreign exchange assets for example are heavily influenced by indexes and commodities. Some important examples of this includes:
- Gold and CHF + JPY (when gold goes up, CHF and JPY gain strength. This means that the USD pairs will be inversely correlated and experience opposite moves (confusing i know))
- Oil and CAD
- Shanghai index and oil
There are many other examples out there for correlated markets and so it'In this case it can often be important to not only look at the charts of both assets but also to watch out for news in both cases. By staying on top of these correlations and watching them closely you can gain a highly valuable edge over the markets.
There are many cases in which foreign exchange assets for example are heavily influenced by indexes and commodities. Some important examples of this includes:
- Gold and CHF + JPY (when gold goes up, CHF and JPY gain strength. This means that the USD pairs will be inversely correlated and experience opposite moves (confusing i know))
- Oil and CAD
- Shanghai index and oil
There are many other examples out there for correlated markets and so it'In this case it can often be important to not only look at the charts of both assets but also to watch out for news in both cases. By staying on top of these correlations and watching them closely you can gain a highly valuable edge over the markets.