Wednesday, April 2, 2008

Using Currencies To Time Equity Moves

Many traders and analysts have taken advantage of the growing correlation between asset classes to forecast movements in one market by analyzing the changes in another. However, while using the changes in equities to forecast price action in risk-sensitive currency pairs has grown in popularity, the reverse (using FX moves to anticipate changes in the equities market) has not. And, considering the currency market’s deep liquidity and 24-hour session, overlooking such an advantage would be missing out on one of the best strategies in current market conditions.

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