forex correlation trading helps forex traders make forex correlation profits

As humans we do not come equipped with the ability to deal with the variety and often times confusing aspects of randomness. We are taught from a very young age to strive for perfection, for high scores in school and in sports. This could be our biggest flaw and is the handicap for a lot of traders. There is no perfection in trading and never will be. It is a profession of chance and liability. Traders must learn to put probability in their favor and realize the markets are extremely random. Most traders forecast future price using some combination of fundamentals, indicators, patterns and experience in the expectation that recent history will forecast the probable future often enough to make a profit. This is fine for those 5% of traders that actually make money, but most forget that Randomness controls the forex market and cannot be predicted.

THE CORRELATION TRADE

Fight Randomness with Randomness by using the Correlation Trade!
Statistically speaking, correlation is the measured relationship between two units over a period of time. Correlation is measured on a range of -1 (perfect negative correlation) to 1 (perfect positive correlation). A positive correlation implies that the two units move in similar directions, the higher the correlation the closer and more accurately these moves are. Conversely, a negative correlation represents opposite movements with a smaller (more negative) number representing a stronger relationship between the opposite movements.

Lucid trades correlating currency pairs because it is a way to potentially profit from the random nature of the foreign exchange market by capitalizing on the random swings and algorithms between correlating currency pairs. Correlation trading can be used as a standalone trading strategy and it can also be used to complement existing strategies. Lucid uses correlation trading to protect your account from large draw downs and provides a simple trading method that has allowed us to take consistent profits from the market.

Lucid likes to use EURUSD and USDCHF in our trading strategy and we almost always treat EURUSD as the dominate pair. They have a near-perfect negative correlation, as you will see from the chart above, but the value of a pip move in the EURUSD is $10 for a lot of 100,000 units while the value of a pip move in USDCHF is $8.34 for the same number of units. This is powerful knowledge for any trader to have and is used to hedge or double up on profits.

If you are interested in placing money in the Correlation Fund please contact us. We would love to show you how you can profit from the FOREX market without losing all your funds.

"The reason there are so many inconsistencies and irregularities that exist within the fundamental and technical approaches to trading is because PRICE ACTION IS RANDOM. It is only logical that a trader should employ a strategy specifically aimed at the random conditions of foreign exchange as this randomness dominates the market." corrfx

Here is a great Tool and link to use to see the 5 min, hourly, daily and weekly correlation.

CORRELATION TABLE

Traders BIO

Shaun Reiffenstein is a full time trader and has been for the last 8 years. He grew up in Canada and worked there for some time in the credit and collection industry. He is currently 40 years old and has a university education. He left the university in his last year after signing a professional wrestling contract. For the next 6 years he traveled and wrestled all around the world. An injury and contract dispute brought his wrestling career to an end in about 1994. Shortly thereafter he returned to Canada and began working in the Credit and collection industry. His career progressed for several years where he held regional management position with a national agency in Toronto. Shortly after that Shaun ended up starting his own business an that is when he discovered FOREX.

Shaun came upon FOREX trading back when there was very little information available and very few brokers for that matter. He dabbled in trading part time believing there was incredible potential with the right approach. After several months of trading he met with a business associate and friend who was a trader with a national bank in Canada. Shaun began to study and learn about the methodology and trading techniques that this bank used pertaining to the FOREX market. This is where the Correlation trading style and technique took root. Correlation trading strategies are primarily prevalent in other financial markets but are rather unorthodox in FOREX. Shaun took some of the basic theories and concepts of correlation trading and developed strategies to cater to the FOREX markets that have attributed to success every year.

6 Month Statement

Trading Plan Presentation