How to Read Market Situations Faster with Inter-Pair Correlation

How to Read Market Situations Faster with Inter-Pair Correlation

There are hundreds and maybe thousands of ways of trading that you can choose before plunging into the world of trading, be it on the stock exchange, forex and commodities. In fact, often a trader owns and controls more than one style or way of trading.

Some market participants argue that a trader must have a commitment and consistent only in one way of trading, others have a trader is obliged to master some trading stance.

Actually there is nothing wrong with these two opinions even though there are advantages and disadvantages of each of those opinions. Those who believe that a trader should be fixated on one way of seeing it as a way to keep the trader’s trades in check.

While those who carry the idea of ​​mastery of several ways of trading see it as a necessity for a trader because of the changing market dynamics. So we return it to each trader willing to believe and follow which opinion because the most important in the world of trading is a consistent positive result.

One way a trader can do in the process of making trading decisions is to see the correlation between the pair or the instrument in each exchange. In fact there are many professional traders who not only see the narrow correlation. They see a wider correlation or so-called inter-market analysis, looking at the relationship between movement in an exchange with other exchanges. One example is to see the correlation between the dynamics of forex and gold trading.

Correlation Matrix

Seeing the above correlation is not easy, it takes precision and patience. Lucky now GKInvest provides MT4 Booster which has various features that can facilitate and help your trading, one of which is Correlation Matrix.

Correlation Matrix shows the correlation between symbols in time frame and certain bar / candlestick that can be configured. Correlation Matrix is ​​calculated from a scale of -100 to +100 where +100 indicates that price movement on A and B symbols is identical / positive correlation. While the -100 scale shows that the price movement on symbols A and B is very opposite. When A rises, then B will decrease, and vice versa (negative correlation).

The following figure shows the Correlation Matrix display on MT4.


How to Read Market Situations Faster with Inter-Pair Correlation

Correlation Trader

Another part of the correlation function is the Correlation Trader which is slightly different from the Correlation Matrix. The main difference lies in the trading execution function (can do open and close position) contained in the Correlation Trader.

The correlation between symbols in a time frame in Correlation Trader can also be configured, for example just to see the current H1 bar / candlestick. The correlation is also measured between the scales of -100 to +100, where +100 indicates that the price movement between symbols A and B is positive correlation and -100 indicates that price movements in symbols A and B are very negative (correlation).

Here is a look at Correlation Trader on MT4.


How to Read Market Situations Faster with Inter-Pair Correlation


Now it is entirely your decision to determine whether you want to see the correlation between pairs of complicated ways or in a much easier and faster way with Correlation Matrix and Correlation Trader.




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