I’m going to take you through the AxiTrader MT4 NexGen Correlation Trader. We drag and drop into the chart.
The Correlation Trader is a neat little tool to help you understand if the currency pairs you are trading are correlated. It works in conjunction with the Correlation Matrix which gives you a broader overview. The Correlation Trader gives you a specific look at 2 different currency pairs that you choose to combine and it will actually allow you to place trades.
If you look at the tool, you can see the area where you can add in the currency you want to trade. The tool is going to come up with the correlations between the 2 currency pairs. The greater the number here, up to 100, the higher the correlation. This can also go into negative so the lower the number, the higher the negative correlation.
It might sound confusing but a negative correlation means that if one currency pair goes up, the other currency pair goes down. A positive correlation means if one currency pair goes up, the other currency pair goes up at the same time. If the number is low or is around zero, it means there is very little correlation between the currency pairs.
If we look at a different timeframe here, this one is fairly negatively correlated. Let’s look at the correlation between the AUS-USD and EUR-USD to see if there’s a better correlation on these timeframes. Often, there’s not, which is quite interesting.
You can see on the tool itself if you have positions. If we went to the EUR-USD and I place a trade and we go back to the Correlation Matrix, you can see now it’s listing our position and our profit/loss. It will do that for both currency pairs.
Finally, you can go in and you can place a new order: Volume, Stop-loss, Take Profit, Non-hedging mode, Buy/Sell, etc. on one of the two currency pairs you have selected.
That’s the Correlation Trader.
Forex trading robots use computer algorithms to help determine the best price at which you should buy or sell a currency pair. Learn about EAs here.