About indicator CorrelationFX

The CorrelationFX indicator is a software solution for analyzing and trading positive and negative correlations between various instruments of the foreign exchange market.
As you know, quotations of many currency pairs move with a high degree of correlation, which has long and effectively been used for the so-called “pair trading” and hedging currency risks.

The CorrelationFX indicator will help you to determine:

• the moment of maximum divergence of quotations of the correlated pairs
• the moment of reverse convergence («collapse») of quotations of the correlated pairs

How to use the CorrelationFX indicator

1. When adding the CorrelationFX indicator to the quotations chart, enter in its manual settings the names of the currency pairs that you want to track the correlation.
2. If desired, change the indicator period, which will allow you to track correlations on larger or smaller time scales.
3. If a split occurs between the indicator lines (which show the dynamics of movement of the currency pairs quotations), make 2 market deals:

• BUY — on the currency pair which line is at the bottom
• SELL — on the currency pair which line is at the top

4. Close trading positions when reverse crossing (collapsing) lines on the indicator.

Description of the CorrelationFX indicator manual settings:

• SuffixPair — the suffix name, which must be added to the currency pairs name (only if your broker displays the names of currency pairs with a suffix)
• Currency pair_1 — the name of the first currency pair
• Reverse_1 — (TRUE / FALSE) — on / off the reverse when displaying the first currency pair line
• Currency pair_2 — name of the second currency pair
• Reverse_2 — (TRUE / FALSE) — on / off the reverse when displaying the second currency pair line
• ControlBars — the number of quote’s candlesticks (bars) on which the correlation is calculated
• ColorPair1 — color of the first currency pair line
• ColorPair2 — color of the second currency pair line
• LineWedht — the thickness of the currency pairs lines
• HistoryBars — the number of quotation’s candles (bars) on which the correlation is monitored