Forex Correlation shows, within some period two currency pairs move in the same direction or opposite direction or random direction. Correlation is a measurement of the relationship between two currency pairs. This Forex correlation indicator will show the entry point & exit point to trade. You can combine other analyses for further clarification.
Trading rules with Currency correlation indicator.
- Forex currency lines must be cross & one line must be below the zero line & other line must be above the zero line.
- Calculate the position of lines.
- If that combine value is greater than 52 it is the best area to enter the trade. You must enter the trade that currencies represent forex trend directions.
- When combine value is felt down below 52, immediately exit from the forex trade.
- When the combined value is greater than 52 wait until the current candle close & beginning a new candle to enter the trade.
See the forex correlation indicator of the above picture. Currency pairs indicate direction is the upper trend. After you got that confirmation you must wait until the combined value has become greater than 52. It is a good entry point to enter the trade.
See the highlighted area above the picture. Crossed the two lines of correlation indicator . But there is no trade. Because those two forex currency lines are above the zero line. For the good movement one currency must stronger & other currency must be weaker. On the other hand, one currency line must be above zero line & other currency line must be below zero line.