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Understand forex market. Knowing currency correlations between the major pairs can help you a lot in your trading. Suppose you have the data about the currency correlations of the major currency pairs. The correlation between GBP/USD and EUR/USD is 0.68. This correlation coefficient is positive and it means both the pairs move in the same direction 68% of the time.

Get good forex training.USD/CHF and EUR/USD have a correlation coefficient of -0.975 and is pretty close to minus one. The negative correlation coefficient means both USD/CHF and EUR/USD pairs move in the opposite direction almost 97.5% of the time. In other words, if USD/CHF moves up, the pair EUR/USD will move down!

Learn forex news trading. You have this information about the recent correlation coefficients. It tells you how much these pairs move in the same direction or opposite direction. Suppose you trade both the currency pairs USD/CHF and EUR/USD by going long. What you will be doing by going long on both the positively correlated pairs is in fact canceling both the long positions.

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Understand the forex market. You are a currency trader. Which currency pairs are the best for trading? Focus on the four major currency pairs EUR/USD, GBP/USD, USD/CHF and USD/JPY. Consider becoming a specialist in USD. Yes, it’s true! You should become a specialist in trading the greenback.Don’t trade without good forex training.

Learn forex news trading.Each currency pair actually comprises two currencies. So if you are long in GBP/USD then you are in fact buying the GBP and selling the USD. In each of the major currency pairs, USD is part of the equation. This means that if you study and understand the fundamentals of US Dollar, the US economy and the workings of the Federal Reserve System, then you have done your homework needed to trade any one of the four major currency pairs.

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