WickCheck / Trading school / Risk on and risk off
Risk on and risk offIntermediate
Market mood: risk on favours stocks and commodity currencies, risk off favours the dollar, yen, franc and often gold.
What it means
Moods shift around big news, earnings and geopolitics. It explains why unrelated markets sometimes move together.
How to spot it
- Indices falling while JPY and CHF rise = risk off.
Common mistakes
- Forcing every move into a macro story.
Related terms
CorrelationHow closely two markets move together, from +1 (same way) to −1 (opposite).…Dollar indexA measure of the US dollar against six major currencies, mostly the euro.…High-impact newsReleases that historically cause large, fast moves.…
Why most strategies need a human behind the screen
Read the lessonWhat a mechanical test can and cannot tell you about smart money concepts.
Education only, not financial advice. Definitions vary between teachers; these are ours, written for clarity.