How Do Currency Pairs Correlate?

Let’s look AudNzd and NzdUsd on 5.30.17

AudNzd — Short — 5.30.17 — Entry at 9:15am

NzdUsd — Long— 5.30.17 — Entry at 9:15am

The correlation is very simple. With AudNzd, Nzd is your quote currency; With NzdUsd, Nzd is your base currency. In a situation like the one above, we look to trade in opposite directions. The photos above show entries on both pairs at the same time but going in opposite directions. Nzd as the base currency was moving long, and Nzd as the quote currency was moving short…that should make logical sense to all of you…I hope.

One the same day, we can also find a winning long signal on NzdChf (another Nzd base pair). This long entry correlates directly to the long entry on NzdUsd earlier in the session.

NzdChf — Long— 5.30.17 — Entry at 10:58am

Looking at the three trades that presented on this past Tuesday, it is very easy to see the correlation between Nzd as a base pair and Nzd as a cross pair. Now, this DOES NOT mean that every Nzd base pair is going to throw a long signal, however it does allow us as short term day traders to know which direction we should be focusing on for each currency pair.

Hope this helps. If you guys ever have any questions or comments email me at thesilverinvestmentgroup@gmail.com

-Austin