Two Hearts

Two hearts, believing in just one mind
Beating together till the end of time

Those are lyrics from a Phil Collins song, for the movie “Buster”, which was, of course,  about The Great Train Robbery.  But it could just as easily have been written about the movements of the S&P and USD/JPY.  These two instruments are highly correlated – in fact, the USD/JPY is almost a proxy for the S&P.  

Have a look at the chart below.  On here you can see the chart shows the S&P500 with the USD/JPY overlayed in blue as a line chart showing the closing price of USD/JPY over the same time period. Notice how they move very closely together.  

Why is this useful information?  Two reasons.

First off, be very careful if you see a chance to trade both of these at the same time.  You could double your profits of course – but your losses will go the same way.  Be patient and trade the chart that looks the best.

Secondly.  If you have a smaller account and trading an eMini is a little rich for you at $50 a point, then trade a smaller amount of USD/JPY.  You’re going to be able to get in on the moves, but with a lower level of risk.  And there is nothing wrong with that.  Consider it a way to build up your account until you are ready to trade the eMini or just keep trading forex. 

Either way, EnigmaSignal will give you high-quality trades.  And plenty of them.