Correlation and Transitivity

Currency pairs are co-relational. The price of each side of the pair depends on the price of the other side of the pair. Correlation refers to how similarly (or dissimilarly) two different pairs move over a period of time. Correlation is typically measured between 1.00 and 0.00. At 1.00, two pairs are perfectly correlatedâ

By Michael Duane Archer
Michael Duane Archer has been an active futures and FOREX trader for more than 35 years. He has worked in various advisory capacities, notably as a commodity trading advisor, registered SEC investment advisor, and branch manager for Heinold of Hawaii. He currently trades FOREX and futures and is involved in several technical analysis research projects.

Copyrighted 2020. Content published with author's permission.

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