Forex Market correlation with other financial markets?

[Connected]

Hey Guys, first post here, great community here btw! :clap:

I'm trading full time since last year, after a bumpy start things are going well!
I trade mainly EU and Cable including a few crosses, I utilise the USDX in my trading and correlation.

The question I would like to ask please is, are there other markets, ie Stocks, Shares, Futures, etc that I can monitor which may assist with Forex trading? I also heard that there was a EURX index? Anyone using this please?

Thank you kindly in advance for any pointers I appreciate your time and sharing of knowledge

 

[NVP]

I trade using Global equities as a kicker .....look up my main thread here or go to my website where some free info is available

as a full time pro trader though I doubt if you will learn anything you dont probably know already

N

 

[NVP]

also aside from the strengthmeter angle to get more indexes look at liteforex.com as they offer free indexes for all the majors if you want them

N

 

[Qdog]

I just have the ES and USDX overlaid on all my charts

 

[Connected]

Thanks NVP and Qdog, really helpful, thanks for sharing your ideas much appreciated!

 

[scose-no-doubt]

If you want to look at correlation between two instruments you need to regress the % returns of one on the other for your specific time frame over a significant sample size. Personally, I also use % relative charts but your problem is then thinking up a suitable rationale for your base level/date. Since the markets seem to be completely gamed of late, as in the past few years, I tend to use major policy announcements or changes to pick mine.

 

[Enzzo]

EURUSD is very correlated to SP500... especially from the US session kick off...
apart from that, they are also correlated to the "risk factor"... so if risk is in "on mode", you will mostly see indices going up, USD losing strength, crude oil going up, metals, etc, etc....
and vice verse, of course....

 

[Connected]

If you want to look at correlation between two instruments you need to regress the % returns of one on the other for your specific time frame over a significant sample size. Personally, I also use % relative charts but your problem is then thinking up a suitable rationale for your base level/date. Since the markets seem to be completely gamed of late, as in the past few years, I tend to use major policy announcements or changes to pick mine.

Excellent insight thank you scose! Correlation of late has been a little hit and miss thats for sure! Happy trading

 

[Connected]

EURUSD is very correlated to SP500... especially from the US session kick off...
apart from that, they are also correlated to the "risk factor"... so if risk is in "on mode", you will mostly see indices going up, USD losing strength, crude oil going up, metals, etc, etc....
and vice verse, of course....

Excellent thank you Ennzo I really need to read up more on risk on and risk off, I will get set up with SP500 data for analysis with EU, thanks again Ennzo for kindly sharing your knowledge! Happy Trading Pal!

Great forum!

 

[Enzzo]

Excellent thank you Ennzo I really need to read up more on risk on and risk off, I will get set up with SP500 data for analysis with EU, thanks again Ennzo for kindly sharing your knowledge! Happy Trading Pal!

Great forum!

Glad to help you a bit....
about correlation stuff, it is a little mess in the head when you start to look at it, but quickly you will see it for yourself and it will help you in your trading for sure...

 

[alphadude]

another much more correlated pair; is AUDUSD vs S&P500

see the correlation chart in Google finance or Yahoo finance; you will get goosepumps

has anyone tried pairs trading between S&P500 against AUDUSD or EURUSD during US session?