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Correlations

EW Analysis: The Connection Between USD and BitcoinHello traders! Today we will talk about US Dollar and Bitcoin! We have noticed very interesting patterns and correlation between US Dollar and Bitcoin. In the first chart we can clearly see bearish setup on US Dollar after that sharp and impulsive decline followed by a three-wave a-b-c expanded flat correction back to ideal 61,8% Fibo. retracement. At the same time, in the sceond chart even EURUSD can be making bullish setup after that strong five-wave rally followed by a three-wave a-b-c decline with a triangle in wave "b" back to ideal 78,6% Fibo. retracement, which indicates a corrective drop! So, based on USD correlations, seems like USD Index can see some weakness in the upcoming sessions at least towards 97.00 - 96.50 area, while EURUSD may start recovering back to 1.1250 highs or maybe even 1.1300 area! Well, as you can see in the third chart, when EURUSD turned down into a correction, even BTCUSD made a bigger and in our opinion corrective decline down to 9500 level, ideally for wave C of a big bullish triangle pattern, which can be seen in our previous idea! So, according to correlations with EURUSD, we believe that even BTCUSD can see a bigger recovery soon, ideally back to 61,8% - 78,6% Fibo. retracement and 11200 - 11700 area for wave D! That being said, while USD Index can be headed lower, watch out for the recovery on EURUSD and BTCUSD in the upcoming week! Bu humble and trade smart! Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
TVC:DXYEducation
by ew-forecast
1
How to Trade Correlations for New Traders - AUD/USD vs NZD/USDWelcome! Here's a super simple chart, and strategy, which can help you get started in your trading journey. Trading strongly correlated pairs and looking for divergences is hardly an industry secret. It's a standard technique, and one that is heavily employed by large institutional investors. Basically, correlation means that certain pairs move in a similar fashion. For AUD/USD (AU) and NZD/USD (NU), they are both based on the USD, and the Australian and New Zealand economies are, broadly speaking, based on similar fundamentals. This means that the factors that impact the price of the AU market, will naturally have similar impacts on the NU market. The great thing about the AU and NU correlation is that it's long lasting, and strong. For a few decades now, the pairs have had a 80%+ positive correlation (a positive correlation means two markets move in the SAME direction, whereas a negative correlation means that move in the OPPOSITE direction). This strong correlation has held steady through some significant market events. The exception is a period between 2014-2016, where correlation dropped to a low of 15% - but that was due to a variety of factors that are too in-depth to cover here. However, it's worth stating that if the correlation were to drop below 80% in the future, this strategy/technique would no longer be valid. Hopefully the chart broadly explains things, but in a nutshell: The pairs should move the same. If they don't, e.g. if AU forms higher highs, but NU forms lower lows, that's a correlation divergence. Basically, the markets have moved out of synch for some reason. Often, these are simply short-term phenomenon, and we're counting on the correlation to re-establish itself, allowing us to profit from it. The nature of correlation divergences is that you don't know which pair is going to break first. Therefore, you need a secondary signal in order to make a trade. For example, AU is making higher highs, and NU is making lower highs - which one is going to break? Well, a simple idea is to grab your favourite momentum indicator and look for divergences on either market. On our chart, this plays out in the mid-late April trade. AU is grinding higher, but forming a bearish momentum divergence. Therefore, we're looking for AU to break lower. We can use a moving average, or a trend line break as our confirmation signal to enter the trade. This one worked out wonderfully, but not all of them will. Positive correlations are, like nearly all trading signals, stronger on higher time frames. on a 5min chart, correlations, like the markets themselves, are far more volatile. This is why I would suggest using H4 as your smallest time frame chart, and look at correlations on a Daily basis. A great website to measure/track correlations is www.mataf.net I hope that that all makes sense. I encourage you to try it out for yourself - pick two strongly correlated pairs and start training your brain to look for divergences. And, as with all trading, don't jump on the first correlation divergence you see. You need a secondary confirmation (e.g. momentum divergence, support/resistance), and then a confirmation signal, before making a trade. Trading success is all about how you do things, not what you do. If you have any questions, feel free to contact me. DD
Education
by DreamsDefined
BNB BTC - Binance Bitcoin correlation - Bitcoin WickOn BNBBTC a big rising wedge is being built --> Target 0.0053785 with ~14% gains. On BNBUSD old support should become resistance --> Target 31.82$ with 27-28% gains Calculating the difference, the result would be a BTC wick to 6000-6050$. Matches with the ascending triangle which is being built and the red channel line on my other post on BTCUSD. With IOTA, ADA and other big coins in falling wedges vs. BTC and ETH in a rising wedge to ~190$ this could all perfectly match. If BTC moves to 6000$, ALTS would lose value vs BTC. (people FOMO buy BTC with their ALTS) If than BTC falls quite rapidly back to 5, 4 and possibly 3k levels, ALTS would fall further. (people who didn't buy BTC with their ALTS will sell ALTS vs USDT) Therefore the falling and rising wedges on the ALTS have a high chance to complete. This would lead us to the Elliott Wave on Total2 that takes us down another ~60-70% to hopefully bottom out in the next 6 months. IMO market also feels overheated, but still it will have a few days left in the tank.
by Thierry88
DXY vs EUR/USD: XABCHi Guys, here below same moves made by EUR/USD: Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
TVC:DXY
by cozzamara
EUR/USD look from the side of a correlationtraderHey guys, after a time of inactivity I"m back. Today I show you how you can trade EUR/USD with the help of correlations. You can see in the chart positive correlations and negative correlations. Be careful the arrows on the chart are no trend direction. If for example Oil change its direction the trend direction of EUR/USD can change but always look at all charts to get a better view into the market. Be careful with long term - trends and short - therm trend. Always be aware of your timeframe. (4h is short therm trading) "no trade recommendation"
Long
by perc_growth_everyday
1
Triangle On Treasuries Suggests Limited Upside On StocksHello traders! Today we will talk about treasuries (10year US Notes) and stocks (S&P500). Well, as you may already know, treasuries and stocks are more or less in negative correlation and what we have noticed that 10y US Notes can be forming a big bullish triangle, while S&P500 can be finally finishing a five-wave rally from lows. In EW theory, triangles are usually continuation patterns, so seems like treasuries can be headed higher, which means that stocks can see limited upside, especially now when we can clearly see five waves up from lows and according to EW rules, after every five waves, a three-wave pullback follows! That said, if we are right, then ideal scenario would be a rally into the final wave "v" on treasuries, while stocks may see a deeper a-b-c correction! So, be aware of a potential sell-off and risk-off mode on stocks. Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
UEducation
by ew-forecast
EUR/USD vs DXY: XABCHi Guys, here below the same moves made by DXY: Thank you for following and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. CozzamaraDaZena is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
by CozzamaraDaZena
DXY vs EUR/USD: some movesHi Guys, as always, please find below the moves made by EUR/USD during the same period. Vertical lines are same dates in both charts. Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
TVC:DXY
by cozzamara
GOLD vs USD/JPY: some correlationsHi Guys as alaways please find below the "correlated" moves on USD/JPY but in the opposite direction: For potential opportunities please also view the related ideas linked below. Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
TVC:GOLD
by cozzamara
GOLD: XABCDHi Guys, below I will post the link to XABCD made by USD/JPY but upside down. US dollar, JPY and Gold have strong correlations. These correlations makes GOLD move one way and USD/JPY the opposite. Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
TVC:GOLD
by cozzamara
USD/JPY: XABCDHi Guys, below I will post the link to XABCD made by GOLD but upside down. US dollar, JPY and Gold have strong correlations. These correlations makes GOLD move one way and USD/JPY the opposite. Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. CozzamaraDaZena is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
by CozzamaraDaZena
GOLD vs USD/JPYHi Guys, this is a thing I am doing but please don't pay too much attention to it. I am posting it so that I can keep record of it and play it in the future to see how it works. Thank you for following and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
TVC:GOLD
by cozzamara
Japanese Yen vs NikkeiThank you for following and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. CozzamaraDaZena is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
J
by CozzamaraDaZena
USD/JPY vs GOLD: inversely correlated movesHi Guys, all day that I've got this crocodile in my mind and trying to figure out how it could affect Gold's movements. If US dollar weakens the crocodile may shut its upper jaw and drive Gold up a little bit. Let's see how the charts unfold. Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. CozzamaraDaZena is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
by CozzamaraDaZena
GOLD vs USD/JPY: inversely correlated movesHi Guys, this is the price action that lead to a similar formation but inverted on USD/JPY. They move like this because they are considered safe heavens vs US dollar. Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
TVC:GOLD
by cozzamara
DXY vs EUR/USD: some moves Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
TVC:DXY
by cozzamara
EUR/USD vs DXY: some moves Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. CozzamaraDaZena is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
by CozzamaraDaZena
EUR/USD vs DXYHi Guys, if the dollar strenghten, EUR/USD weakens right? The opposite is also true. Just a natural consequence. The moves of one market influence the movements of the other. The moves of one market influence the movements of the other. you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
by cozzamara