Correlations show how different assets move in relation to each other. Traders use them to understand market dynamics, manage risk, and build diversified portfolios. Key examples include the inverse relationship between stocks and the VIX, gold and the U.S. dollar, or the strong alignment between Bitcoin and tech stocks. These relationships can shift across market conditions like bull runs, crashes, and recessions.
Read MoreTrading Psychology: Successful trading is not only about strategies and analysis, but mainly about mental strength. Emotions like fear and greed strongly influence decision-making. Mental discipline, consistent risk management, keeping a trading journal, following clear rules, avoiding excessive leverage, and structured position management are key factors for long-term success and control in the financial markets.
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