How is it calculated? and Do you Manage risk by following forex correlation?
How is it calculated? and Do you Manage risk by following forex correlation?
I think you should first understand first what the correlation means and how it works, then you can easily deduce the benefits. For instance; if two currency pairs have a high correlation, their prices tend to rise and fall in sync.
It depends on what I want
You should only risk a small portion of your trading capital per trade: a good starting point would be to not risk more than 1% of your available capital per trade. If you’re applying sound RRR then that means risking 1% to potentially return 3%.
I've been away from currency trades for a while. I just took a look at some of my past favorites & noticed that both the CHF & EUR are up against the USD in the last few months. The EUR seems to still have more Gama behind it at this time, if I only look at the charts.
“The Federal Reserve is not currently forecasting a recession.”
Fed Chairman Ben Bernanke, January 2008
This is no longer posted in the Fed Minutes of January 2008, but still quoted here - https://www.nbcnews.com/id/wbna22592939. The FOMC minutes still quote MR. Reifschneider. as stating the same thing.
Buried in this piece about many other things, is a bit about possible sanctions on Switzerland & Swiss individuals, which is something that I did not expect.
https://www.zerohedge.com/geopolitic...lf-shady-deals
Is it time to watch the CHF?
“The Federal Reserve is not currently forecasting a recession.”
Fed Chairman Ben Bernanke, January 2008
This is no longer posted in the Fed Minutes of January 2008, but still quoted here - https://www.nbcnews.com/id/wbna22592939. The FOMC minutes still quote MR. Reifschneider. as stating the same thing.
It is my belief that Switzerland is a last resort place of refuge in case of major distress in the world.
If there is a nuclear exchange, it may be one of the safer and more comfortable places on the planet ( relatively speaking)
It will one of the few places that is not targeted ( advanced economies) Its borders are easily defended and has
advanced medical and technology and financial system, has protected its farmers, and is fairly homogeneous culturally.
It also has by far the most gold per person in the world.
I am betting, much like in WW2 it is in the 'clubs' interests, on all sides to let it remain as it is.
Its currency remains one of the strongest in the world for good reason. I do not believe this shady characters attempts will amount to more than a
passing nuisance, in my opinion. Excellent article though.
Switzerland has had the strongest currency in the last 5 years by a fair bit. Guess they are doing something right. Gold is only up 44% against it
For comparison Gold is up 59% against US $ in same 5 year period.
68% against China
70% against Pound
74% against Euro
80% against India
112% against Japan
140% against Russia
Guess there is something to be said about all currencies devaluing quickly these days when compared to a common (non inflatable) asset - sometimes referred to as real money