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Month: January 2019

How to use correlation when forex trading

How to use correlation when forex trading

The term correlation simply means the relationship between two things, like the following example:

Imagine you are a CEO of a public company that manufacturers clothes from cotton. What would happen to your margins if the price of cotton goes up? If you keep the price of the company’s products unchanged, your margins will be squeezed. When the margins are squeezed, it is possible that the stock price of your company will decline. In simple terms, this is what is known as correlation.

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