You\u2019re long EUR\/USD.
You\u2019re long\u00a0GBP\/USD.<\/p>\n
Looks diversified? Not necessarily. \ud83d\udc40<\/p>\n
Both positions may be driven by the same underlying force\u200a\u2014\u200athe US dollar. If that driver moves against you, two seemingly separate trades can start losing together.<\/p>\n
That\u2019s where correlation<\/strong> matters.<\/p>\n \ud83d\udd17 Positive correlation\u200a\u2014\u200amarkets tend to move together And here\u2019s the trap: correlation is not a trading signal, a probability or a guaranteed hedge.<\/strong> A reading of +0.70 does NOT mean two assets move together 70% of the\u00a0time.<\/p>\n The real question isn\u2019t just \u201cHow many positions do I\u00a0have?\u201d<\/em><\/p>\n It\u2019s \u201cHow many different risks do I actually have?\u201d<\/strong>\u00a0\ud83c\udfaf<\/p>\n Learn how correlation can reveal hidden exposure, false diversification and changing relationships between\u00a0markets.<\/p>\n \ud83d\udc49 Read the full NordFX guide: #NordFX #Trading #Forex #Correlation #RiskManagement #TradingEducation<\/p>\n \ud83d\udcca Two trades. Two charts. One risk?<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" You\u2019re long EUR\/USD.You\u2019re long\u00a0GBP\/USD. Looks diversified? Not necessarily. \ud83d\udc40 Both positions may be driven by the same underlying force\u200a\u2014\u200athe US dollar. If that driver moves against you, two seemingly separate trades can start losing together. That\u2019s where correlation matters. \ud83d\udd17 Positive correlation\u200a\u2014\u200amarkets tend to move together\u2194\ufe0f Negative correlation\u200a\u2014\u200athey tend to move in opposite directions\ud83d\udd04 Changing […]<\/p>\n","protected":false},"author":0,"featured_media":239277,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-239276","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/239276"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=239276"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/239276\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/239277"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=239276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=239276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=239276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\u2194\ufe0f Negative correlation\u200a\u2014\u200athey tend to move in opposite directions
\ud83d\udd04 Changing correlation\u200a\u2014\u200ayesterday\u2019s relationship may not work\u00a0tomorrow<\/p>\n
https:\/\/nordfx.com\/useful-articles\/correlation-in-trading?utm_source=social&utm_medium=post&utm_campaign=nordfx<\/a><\/p>\n