Correlation in forex

Hi traders, I want us to discuss correlation in forex trading because it is a subject most beginners are unaware of. Please feel free to attach screenshots as you make your contribution.

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@yokoyi - 1 hour ago

There are some forex pairs that move opposite to others and we call this "negative correlation".

An example of negative correlation is the relationship between EUR/USD and USD/JPY as shown on this 5-minute multi-chart from cTrader.

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@yokoyi - 1 hour ago
Quoted - yokoyi

There are some forex pairs that move opposite to others and we call this "negative correlation".

An example of negative correlation is the relationship between EUR/USD and USD/JPY as shown on this 5-minute multi-chart from cTrader.

Beware of Counterproductivity

Now this is my opinion: it would be counterproductive to open simultaneous trades (in the same direction) on two negatively correlated pairs, because your work done will be zero at the end.

For instance if you open two buy trades on EUR/USD and USD/JPY you will end up with zero because even of you win one, you will likely lose the other.