Currency Correlations for profit? Currency traders?
Can currency correlation charts be used for HOLDING currencies and make a profit? I mean without margin and without using a forex broker? By simply BUYING and HOLDING various currencies in a multi currency account and laddering and exchanging them as the values increase according to each pair? If so please explain.
You could….but why would you? One of the main advantages of participating in the Forex marketplace is the use of leverage. If one understands what they are doing leverage is one of the keys to making consistent favorable profits in the Forex market.
If you were to simply buy currencies you would not be buying at the actual spot price and you will be paying a commission when you buy your currencies and also when you sell.
It might also be a bit of a challenge being able to consistently guess which way a currencies value or exchange rate would move. And finally, if your decisions are based on corellations you need to be aware of the fact that currency correlations are in a constant state of flux.
Personally, I think this might be a tough play. My clients and I simply use a hedge trading strategy that consistently earns us more in a month than a bank pays in a year. It takes us about 30 minutes a week to manage an account of any size and we can make money if the market goes up or down.
Good luck.
paul
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