Uncorrelated pairs

[kingie_d]

hello,
I am short term swing trading using Daily charts and would like to filter down the amount of pairs I am using. I only trade using 1% risk so if I trade 2 pairs which are highly correlated, then essentially I have twice the risk on.

What is a good selection of pairs that are fairly uncorrelated.

I currently have a universe of 10 pairs at the moment and am in the process of filtering to hopefully get "separate" trades.

Cheers

 

[BentRod]

Gday Kingie.

Try this mate:

http://fxlabs.oanda.com/cgi/fxlabs.pl?id=4

 

[tayser]

two sets of pairs which doesn't follow each other all that regularly:

EUR/USD & EUR/GBP
GBP/USD & EUR/GBP

EUR/GBP is a slow mover, but the pip value is twice as much as GBP/USD or EUR/USD (well EUR/GBP's pip value is effectively the current GBP/USD rate when you compare with GBP/USD and EUR/USD)

USD/CHF = opposite of EUR/USD from what I've seen in active (London) times.

 

[kingie_d]

Cheers guys, I had a bit of a look around at the oanda correlation site and at this one:

http://www.mataf.net/en/forex/trading/correlation/table/

I messed around with the tables to find a group of pairs that isn't too correlated and got this:

EUR/USD
EUR/GBP
EUR/CHF
EUR/CAD
CAD/JPY OR GBP/JPY

On the tables they are not correlated, but since 4 of them use the Euro, doesn't that still essentially give them a high correlation? Or could you just think of it as 4 seperate currencies compared to the Euro instead of the USD? I hope you get what I mean and this doesn't just sound like a stupid coomment...

 

[Page]

These are the great selection of pairs and mostly people likes to trade on these currency.

EUR/USD
USD/GPB
USD/AUD
USD/JPY

 

[tayser]

^ Sterling and AUD always come first except when EUR is the other currency in the pair:

GBP/USD
AUD/USD
EUR/GBP
EUR/AUD
GBP/AUD

etc.