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Correlation Trader

Correlation Trader

The Correlation Trader lets traders compare correlation between two symbols, and trade emerging differences. It shows both the correlation between the symbols and also recent price activity and any open positions in the chosen symbols.

 

 

The Correlation Trader takes the valuable information in the Correlation Matrix and extends it so that traders can trade real-time differences in correlation between two markets of their choice. The Correlation Trader shows not only the current correlation between the two chosen symbols, but also the recent price activity helping the trader to make better informed decisions. Traders can use the Correlation Trader tool for two main purposes:

 

  • To inspect historic correlation between symbols in more detail
  • To watch for, and trade, emerging differences in that correlation

 

The trader can choose any timeframe for the historic charts - including periods such as M3 or H8 which are not always supported by the underlying platform - and they can then use their judgement, in combination with the current correlation, to watch for tradeable differences in the relationship between symbols. For example, if the correlation figures show a strong relationship between EUR/USD and USD/JPY over recent trading, but the latest price movements suggest a break-down in the relationship, then that could constitute a trading opportunity.

 

The Correlation Trader includes a simple deal ticket for placing orders directly from the tool, without needing to go back to the underlying platform.

 

The Correlation Trader tool can also be used just as a simple way of displaying two price charts next to each other, along with the current open position and profit for each symbol.

 

About correlation

 

Correlation can have a major effect on trading risk. For example, if EUR/USD and USD/CHF have been strongly correlated, then a trader who had open positions in both would have seen very similar profits on each position. In effect, the trader did not have two positions; they only really had one position. (They will either have seen similar profits or losses on each position, or they will have seen matching profits and losses which largely cancelled each other out).

 

It is generally advisable for a trader to minimise the correlation between their open positions. Otherwise, they are either trading the same price action twice over, or they have two positions which largely cancel each other out.

 

Click here to download the user guide: BlackPearlFX – Correlation Trader.pdf

REGULATION AND LICENCING

CFDs and Spot FX are leveraged products and carry a high degree of risk to your capital. It is possible to lose more than your initial investment so only speculate with money you can afford to lose. CFDs and Spot FX may not be suitable for all investors so please ensure you fully understand the risks involved, seeking independent advice if necessary. 

BlackPearlFX is a trading name of Black Pearl Securities Limited (Company number 08823678). Black Pearl Securities Limited is authorized and regulated by the Financial Conduct Authority, Financial Services Register Number 688456. Registered office address: 23 Austin Friars, London, EC2N 2QP. United Kingdom

Relationships listed throughout the website may be directly or indirectly established with Black Pearl Securities Limited or its trading name BlackPearlFX. The Entities listed include custodian banks, clearing partners, liquidity providers, technology providers, news & market data vendors, among others. Names and Logos of listed entities are the property of their respective owners. 

BlackPearlFX’s Payment and Foreign Currency Exchange Services are provided by Ebury Partners UK Limited. Ebury Partners UK Limited is authorised and regulated by the Financial Conduct Authority as an Authorised Payment Institution (Financial Services Register No. 522933).

The information on this site is not directed at residents of the United States, Japan, Afghanistan, Algeria, Angola, Bosnia and Herzegovina, Cuba,Guyana, Iran, Iraq, Lao PDR, Myanmar, North Korea, Papua New Guinea, Sudan, Syria, Uganda, Yemen or any particular country outside the United Kingdom and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law and regulation.

www.blackpearlfx.com is owned and operated by Black Pearl Securities Ltd.

Website Terms and Conditions | Risk Warning Notice | Customer Terms and Conditions

REGULATION AND LICENCING

CFDs and Spot FX are leveraged products and carry a high degree of risk to your capital. It is possible to lose more than your initial investment so only speculate with money you can afford to lose. CFDs and Spot FX may not be suitable for all investors so please ensure you fully understand the risks involved, seeking independent advice if necessary. 

BlackPearlFX is a trading name of Black Pearl Securities Limited (Company number 08823678). Black Pearl Securities Limited is authorized and regulated by the Financial Conduct Authority, Financial Services Register Number 688456. Registered office address: 36 Whitefriars Street, London, EC4Y 8BQ. United Kingdom

Relationships listed throughout the website may be directly or indirectly established with Black Pearl Securities Limited or its trading name BlackPearlFX. The Entities listed include custodian banks, clearing partners, liquidity providers, technology providers, news & market data vendors, among others. Names and Logos of listed entities are the property of their respective owners. 

BlackPearlEX’s Payment and Foreign Currency Exchange Services are provided by Ebury Partners UK Limited. Ebury Partners UK Limited is authorised and regulated by the Financial Conduct Authority as an Authorised Payment Institution (Financial Services Register No. 522933).

The information on this site is not directed at residents of the United States, Japan, Afghanistan, Algeria, Angola, Bosnia and Herzegovina, Canada, Cuba,Guyana, Iran, Iraq, Lao PDR, Myanmar, North Korea, Papua New Guinea, Sudan, Syria, Uganda, Yemen or any particular country outside the United Kingdom and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law and regulation.

www.blackpearlfx.com is owned and operated by Black Pearl Securities Ltd.

Website Terms and Conditions | Risk Warning Notice | Customer Terms and Conditions