On the unequal probability of a price move up or down - page 81
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There's about: buy eurgbp = buy eurusd + eurgbp*sell gbpusd and just the difference at the same time with charts on live data.
The "similarity" shape is there - the correlation is about 80%
I realised today that indeed pair trading has an advantage and the explanation is very simple.
Simple, and the one I mentioned above: the ability to independently manage the odds in front of the traded currencies, their impact on the outcome of the trade, which is not the case with cross trading.
Simple, and the one I mentioned above: the ability to independently manage the ratios in front of the traded currencies, their influence on the outcome of the deal, which is not the case with cross trading.
I mean trading not necessarily a cross. Let's say I'm going to trade a pair trading the eu and pound and someone, using all the same information that I do in pair trading, trades a single symbol, e.g. the eu. I will have the advantage and it is explained simply.
But if the eu had jumped up 2-3 "figures" today? And the dollar and yen were standing flat. Shall we close the moose?
So one has failed to construct it correctly. Otherwise the correlation would be strictly 1, the difference between the result of the eurgbp trade and the pair of eurusd and gbpusd trades at the level of machine zero error.
Good. Your statement and the fact you gave is "...the difference between the result of eurgbp trade and a pair of eurusd and gbpusd trades is at the level of machine zero error...".
The real life trade result, for each of the symbols, takes into account the overheads - swap, commissions, entry/opening error at a given price, etc. How do you account for them? In a synthetic/machine model a "machine zero" (synthetic) may appear, but in reality almost never. If you simulate considering all these parameters (and in fact there are more of them) - zero or null can be obtained by adjusting the parameters.
Basically, EURGBP is an indicator for EURUSD and GBPUSD (this is true for any combination of any triplets). For example for me it doesn't really matter where the market goes, I would like to build structures with high volatility of the current trading result in acertain corridor of losses and profits - it's probably all clear here. (Regarding the probability - I accept losses and profits, it's just a matter of time before they change each other with equal probability)
I try to damp EURUSD and GBPUSD open positions with a position on EURGBP.
EURUSD SELL Lots A
GBPUSD BUY Lots B
EURGBP BUY Lots C
It is interesting, but there is not enough data yet, so I cannot assert anything. Intuitively it seems that nothing interferes with this possibly positive approach.
UPD: The question is not how much, but when. We cannot ignore the time factor. All trade results (order sets) may be positive.
I'm going to show trick number eight tonight. Do you realise how quickly the probability of showing a series of tricks decreases if they were based on chance? If it were 50%/50% probability, then already on five trades the probability that all five are successful is just over 3%, on eight trades less than 0.4%, and on ten trades less than 0.1%. When I show the eighth, ninth, and tenth tricks - remember that )
I don't know why you go to work, you could make money on the forex market).
Of course I do. A stat of 20 deals is already serious. Joker also showed 10 steps on synthetics from majors, but then something broke.
I don't know why you go to work, you could make money on forex).