Michael Suggests Looking at Asset Correlations before Initiating a Trade


Asset correlation analysis, is a technique in which you compare two different real-time graphs. You can use it with whatever strategy you are already using. It’s a great tool, and it will either disqualify, or qualify your trade prediction. You can use it as a secondary indicator, which could either confirm or deny your initial trading inclination. Some assets have a direct correlation, which means that for example if AUD is moving in an uptrend, Gold chart will follow, just because these two assets have a direct correlation. Just don’t worry why the two assets are correlated, just use the two charts.

Superimpose one graph on top of the other on your platform, thus confirming a trend is underway. Let’s say you want to buy a call option on Oil, but you notice the EUR/USD graph is in a downtrend, then you would consider this a disqualification of your impending trade. This correlation analysis would definitely supplement your analysis.

Michael uses this correlation analysis, when trading Oil or Gold, or any asset that has a direct correlation with another asset. One good options broker which allows trading a variety of assets is anyoption™. It has one of the lowest levels of starting investment, at $200.

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