Correlation strategy for Binary Options or Forex

This strategy can indicate us entries in the financial Market depending on the movement of other quotations that correlate among each other. We have to take into account that this is a complement strategy, so initially, it should not be used as a main strategy since we have to know it and try it before making it our main strategy.

If we study the Market, we will see that there is correlation among some products. The best known is between gold and silver. If gold rises, silver rises. If gold falls, silver falls. We also have negative correlations. In this case, the best known is Forex currency, which is euro with dollar, EUR/USD and dollar with Swiss franc, USD/CHF. When euro rises, Swiss franc rises, when euro falls, Swiss franc falls.

How to implement correlation strategy for Binary Options

This strategy can be very useful because in many occasions currency, raw materials or an index do not have the same movement, so in this case, the most advisable thing to do is to divide the investment capital in two parts. This way, we will be able to control risk and obtain gains from the financial product that moves the most. This is how we can use this strategy:

Opening two operations in the same direction:  if we make an entry in gold XAU/USD in purchase CALL, we can also make an entry in silver XAG/USD in purchase CALL, and viceversa. If gold falls, we can also sell silver in placing a PUT.

Opening two operations in different directions:  if we make an entry in EUR/USD with purchase CALL, we have to do an operation in sale PUT in USD/CHF, that would be in favor of the Swiss franc, or viceversa, a PUT in sale in EUR/USD and CALL purchase in CHF/USD.

Implementing the continuity and correlation strategy:  this is the strategy I use and I think it is very useful, specially to cover losses. In this case, continuing with the signals CALL and PUT, sales and purchase, we do it in both operations, where we see the correlation between one and the other in the graphic.

Advantages of the strategy of correlation

• This is a very efficient strategy and can give us several benefits, giving us the possibility of opening two accounts instead of only one.
• We can apply it for any financial product.

Disadvantage of the strategy correlation for Binary Options

• The strategy needs a main strategy to indicate when to do the operations.

Opinions and advice for the strategy of correlation for Binary Options

We have to know that, in the majority of the cases, it is a secondary strategy, but it can help us when the time to do operations come. Correlation is very effective since it has an accuracy of 90%. In these cases, whe can also find more correlations, for example in the CAD/JPY or between American indices and the British one.

In order to avoid risk, we should enter the strategy with less money than the money we entered the operation. For example, if we entered the operation with $100, we should enter the strategy with $75 maximum.