Category: Foreign Exchange

Correlations and trading

Correlation not causation. Ok, we’ve heard that thousands of time before. The difficulty is that we cannot simply ignore correlation if we are trading financial markets. The relationships between different assets and other data is often crucial to forecasting the market. If we were forced to ignore it, you’d end up ignoring so much data…

Going with the FX flow

In this paper, we discuss using CLS intraday hourly flow data to understand FX markets. Using two different trading strategies (daily and hourly) against a generic trend model, we find that CLS’s flow data relating to funds and non-bank financial firms (NBFIs) tends to have a positive contribution to spot returns when viewed on an…