Components of a trend trading system - page 2
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Sorry for not being clear. I meant does anyone take into consideration correlation of prices between open positions in various currency pairs. I think AIS got my meaning. I am interested in seeing how people handle this component (if at all) in a trend-following portfolio of currency pairs.
Sorry for not being clear. I meant does anyone take into consideration correlation of prices between open positions in various currency pairs. I think AIS got my meaning. I am interested in seeing how people handle this component (if at all) in a trend-following portfolio of currency pairs.
Well I'm no Guru but the few examples I've read about works more like a heat-gauge between different instruments. The gauge is used to measure the strength of the EUR (for example) against different instruments. Lets take the top 4 currencies, if EUR is showing bullish average direction movement stronger than 2 other currencies, this could indicate a bull trend.
Of course, if you held open positions in EUR against pairs its stronger against, from a lazy programming stand-point you could use those positions as indicators of trend... I guess. Again, this is all theory to me, and i would think a better way would be to look at the EUR across the board to get a broader picture instead of bias to your open position against a few pairs.