Avoid over-exposure. Identify which currency pairs move together and which move in opposite directions to build a truly diversified trading portfolio.
If you trade EURUSD and GBPUSD simultaneously, you aren't diversifying — you are doubling your risk on the US Dollar. Since these pairs have a high positive correlation, they move in the same direction 80-90% of the time.
Conversely, EURUSD and USDCHF have a strong negative correlation. Trading them in the same direction creates a "hedge" that may cancel out your profits.
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Explore related calculators to sharpen your edge
Calculate net profit/loss for any currency pair trade in your account currency
Calculate the dollar value of a pip for any lot size and currency pair
Calculate the optimal lot size based on your risk percentage and stop loss
Calculate required margin and leverage impact for forex positions