I hope you are all having a great holiday ! :)
- One way to double your profits in almost any trade is to add the sister pair(s) into your portfolio.
If you spot a high probability trade setup on EUR/USD , the scenario is most likely to occur on its sister pair USD/CHF , but in this example the inverse is true as they are in anti-correlation. However this can also ruin your bankroll if you don't know what you are doing as this acts as a double edged sword, so proceed with caution if you are new to forex.
Here is a great heat map that you can use to spot strong correlation and anti-correlation: http://fxtrade.oanda.com/analysis/currency-correlation.
How to use the heat map?
Simply choose the symbol of the pair you are looking to trade and historical correlation data will come up on all pairs.
- If you press EUR/USD , you will see that USD/CHF is strongly blue all throughout the timeframes, this means that they are in strong anti-correlation. The opposite is true if the colour is strongly red, example : USD/JPY and CAD/JPY .
Good Luck !
- And let me know if you have any questions.