Demonstrating the cluster approach to market... - page 23
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If you look at the synthetic and natural pairs, there are differences, so some people think that there is no tight connection and believe that you should have all available tools for analysis. Others think there is a tight connection, that if the difference is + or - a couple of points (within the spread) it is a trifle, and think that having quotes only for some major pairs you can calculate the rest. Has anyone tried to analyse the difference in these two pips as often + 2 pips or - divergence and add them up? Only these differences can be seen after dividing a pair into pairs and comparing them with a third pair (euro/yen, dolar/yen, euro/dollar), but how to see these differences in each pair (relative to what roughly speaking)
What do you think about this?
something like this only through divergence :
Another example is speculative. Before the crisis the rate differential between GB and Japan was over 5%. If you took a leverage of 1:100. then you could really get up to 500% p.a. I.e. buy the pound for 10% of funds and sell the yen. get about 50% p.a. on swaps alone. But no one will sell us a large amount of pounds immediately. and a lot of yen we also can not sell quickly. so we see a 2-3 year trend
Such a cluster does not take into account the different level of influence of one currency on another. You can build a cluster but just so easily the naked eye will not see this influence.
Valera, read both articles I referred to in my previous post, and it will become clear to you that if you trade not one pair, but a cluster, the level of influence of one pair on another makes no sense at all. The main thing in this case is the direction of market SEGMENT movement. And it does not matter how many points the movement of one pair affects the other, the only important thing is which direction the basket of orders will go. Among them there will be losing orders, but they will be a minority both in quantitative and qualitative ratio. This is quite enough to benefit from without having to pluck hairs from your tummy.
Hmmm, post #666 - is that symbolic or what???
Here are the corrected indicators.
Thanks, I'll compare them tomorrow!
Indeed the latest turkeys do not suffer from lagging. Thanks again!
Valera, read both articles linked in my previous post and it will become clear to you that if you trade not one pair, but a cluster, the level of influence of one pair on another loses all meaning. The main thing in this case is the direction of market SEGMENT movement. And it does not matter how many points the movement of one pair affects the other, the only important thing is which direction the basket of orders will go. Among them there will be losing orders, but they will be a minority both in quantitative and qualitative ratio. This is quite enough to benefit from without having to pluck hairs from your tummy.
Hmm, post #666 - is that symbolic or what???
Well for example take a cluster for Euro, in a cluster for Euro out of all pairs with Euro may bring + most, and a couple of some pairs are in the red, the general balance is plus. Suddenly, the balance turns red and you cannot see the reason, so you cannot follow the market, because this could be justified by one or another pair, and you are watching all pairs at once and cannot find the reason, because you are averaging the data.
moskitman:
But this is veiled by spread changes and filtering by the DCs