In this article, I'll tell you in detail how to use the data from my table correlations of currencies to trade binary options. Samu online table with variable data you will find in this article a little lower. In the beginning, I will tell you that such a correlation and how it can be used to earn money on the binary options.
What is the correlation?
Correlation (Correlatio the Latin means "relationship, the relationship") - a definite statistical relationship between two or more random variables. Where a change in the value of systematically accompanied by a change in another variable.
In the role of measuring the correlation of random variables performs correlation ratio and the coefficient of correlation. The correlation between several currency pairs, Indicates the existence of a certain statistical relationship. But often for simple correlation analysis can hide false intuitive conclusions about the presence of some - any statistical relationship. To reduce the errors to the minimum necessary to calculate the correlation coefficients, and based on the correlation coefficient to decide to open a deal or not.
The degree of dependence between several phenomena is widely used in economics, statistics, mathematics and, of course, trading. Statistical dependence does not always give 100% of the guaranteed result, and the cause-effect relationship is not always so obvious. For example, considering crimes in a certain area, you can find a high correlation between the level of crime and the number of police in the area. Moreover, the correlation coefficient will be positive. However, this does not mean that if the number of policemen is increased, then the level of crime will increase, and moreover, the decision will not succeed with the decision to get rid of crime by closing the police station. The result will be affected by external factors, which means that it is impossible to make an accurate forecast.
The coefficients the correlation of currency pairs It can be both positive and negative. The coefficients are arranged in the range of up to 1 -1 and are calculated using the following formula.
Using this formula and analysis of currency pairs, obtained by processing according to the formula of statistical data, it is possible to measure the closeness of the relationship of different situations.
Communication defined the correlation coefficient can be very strong. For example, we can say that the man who found work in a steel plant will have health problems. And if you increase the time for the worker, the greater the strain on the body he will receive. In this case, the correlation coefficient will tend to -1, we will see a negative correlation.
Objects and events can not be linked. For example, an annual holiday at the seaside director does not affect the life of his slave. In this situation, the correlation coefficient is equal to zero.
If the director does not go with his family to the south, and the saved money to spend on improving the environmental situation in the mother company, for example, the purchase of expensive interior air filters, the milk will begin to issue work, introduce shorter working day. This is undoubtedly a positive impact on worker health. In this example we can see the correlation coefficient is + 1.
From the examples, you clearly understand that by using the correlation can be calculated, and to relate one event to another. However, to calculate the coefficient of correlation can only phenomena. Correlation is possible if there is a relationship between the objects.
How does the correlation of exchange binary options?
For a start it must be said that only a small number of private investors enjoys the principle of the correlation pairs in their trade. Most likely, this is from a poor awareness and unwillingness to understand the subject. A professional trader who knows about diversifying their trades, currency correlation table will always use, before opening a new option. With the help of this simple piece, absolutely any investor can greatly improve your score.
In his work with the binary options, I only trade currency pairs. Therefore, currency correlation is particularly relevant for me. Every time I have an open transaction and I want to simultaneously open another new deal, I'm always watching the other correlated currency pairs to my open trade.
For example, I opened up the option up on the currency pair EUR / USDThen my attention was attracted by the pair EUR / CHF, I saw the EUR / CHF can be taken down. The correlation table I saw the EUR / USD is in communication with the pair EUR / CHF with 0,76 factor. It is highly probable that the EUR / USD and EUR / CHF continue to repeat the movements of each other, thus opening a new deal makes no sense.
Or I wanted to open a deal for the pair EUR / CHF up, I saw that on the EUR / USD pair also observed the trend is up. Table currency correlation, I saw that these couples have a high positive correlation, therefore, here's an extra tip that your prediction will be correct.
Thus, analyzing the number of currency pairs with high correlation properties, you increase your chance of winning!
Now consider the example for clarity
Watching signals Technical Summary in the sidebar of my site, choose intervals 1 hours.
Keep an eye on the pair EUR / USD. When you see the opposite resume actively buying or actively sell, Choose the most correlated currency pair, and open for this pair the transaction for a time ranging from 45 minutes to 1 hours 15 minutes. Depending on what your broker is offering. Remember about the coefficients, a good correlation coefficient is considered from 0,76 to 1 and from -1 to -0,76. In the correlation table, look for currency pairs with the highest degree of correlation. If the correlation is positive, then open one option at a signal, if the correlation is negative, then open one option to the other side of the signal. Thus, in practice you will learn to use correlation and in such a cunning way you will earn money.
The correlation of the dollar and oil
The article will not be complete if no mention another depending, known to almost all people, even far away from trading. In the course of the US dollar and the black gold has an inverse correlation. The stronger US dollar, the lower the cost of crude oil.
The US economy is dependent on oil. The industrial needs of this country require a huge amount of oil. The USA is one of the world leaders in the extraction of black gold. The pumping of oil from its own resources does not cover the domestic consumption of the country. Therefore, America is forced to annually import 8 billion barrels of oil. This is an impressive figure, even for a country like the United States. The more US demand for oil, the higher its price in the financial markets. The more oil imports, the higher the cost of manufactured goods. The increase in prices for goods, negatively affects the national currency of the United States. To all this, the Arabs sell their oil for the Euro. In the aggregate of all this, there is an excessive amount of American dollars on the market and they are beginning to lose value.
See what happens at the time of the global financial crisis that began in the year 2008. At the moment we have cheap oil at $ 40 per barrel and expensive dollar exchange offices, 63 1 Russian rubles per dollar. Therefore, if a technical summary of the EUR / USD with settings ranging 1 hours actively recommend to buy or sell, you can open the option of oil at a time from the 45 1 minutes and an hour 15 minutes away, which suggests a technical summary.
These "codes chit-" trade binary options can be applied in the forex market. Each signal from a technical summary can be filtered on a live schedule additional indicator. If you do not want to do their own analysis of the market, you can trust it to me. In my chat closed signals, I trade daily every weekday. In the chat, you can copy my signals online. What you need to chat >>>
As you can see, there is nothing complicated about the correlation. Only through the use of the trade of currency correlations, you will be able to diversify risks and increase the number of winning trades. Financial literacy means your profits. I am sincerely glad that you, having read this article to the end, using simple rules and my online tables will be able to earn more.
!!! Tabiths correlation of currencies, hourly (works in online mode + automatic update) !!!
|AUD / JPY||AUD / USD||EUR / CHF||EUR / GBP||EUR / JPY||GBP / CHF||GBP / JPY||GBP / USD||NZD / USD||USD / CAD||USD / CHF||USD / JPY|
|EUR / USD||-0.18||-0.64||0.44||0.84||0.83||-0.89||-0.58||-0.58||-0.65||-0.12||-0.66||0.37|