What is the Smart Bridge Technology thing - hedging currency risks? - page 3

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Естественно, не обходится и без подводных камней. Один из них - это различие хода цен в пунктах и в стоимостном выражении, другой - определение момента входа в рынок, третий - трудность алгоритмизации, четвертый - практическая невозможность что бы то ни было посчитать (имеется ввиду ожидаемая прибыль, время ее достижения, относительная и абсолютная просадка и т.д.), пятый... шестой...(ещё?)

Highlighted enough. This is the approach of Semyon Semenych and others. The method is interesting, but it is not hedging, but rather a basket-portfolio approach. I would not call it portfolio approach in its pure form - it has its own criteria. The idea is good, but it seems to me, and what I have tried to do in this direction, sometimes gives considerable losses. And most of them hinge on the calculation relativity and smoothness of the "currency indexes". It often happens that we enter the market either at false positions or too late to capture something. And if we add the duration of order execution, the result is less than we would like it to be.

The direction is good, but we have to use the other side and the other foot.

 
moskitman:

So...
Initial position - the Australian dollar is weakening.
 Trade decisions: sell AUDUSD, sell AUDCHF, buy EURAUD, sell AUDJPY, ... etc.
Thus, a basket of orders is formed for seven (in the long term seven) currency pairs comprising the currency rate which is ultimately used as a base for betting on its fall.
The beauty of the Currency market (as opposed to the stock market) is that it is in fact a closed system, which means that if the Yen, for example, due to its own political movement has caused you to lose an order on AUDJPY, and the Aussie keeps falling in total, orders on other currencies will compensate for this loss with their profits. (Speaking of hedging).
The reason why this happens is that the currency Pairs quotes have to keep in a kind of "balance" with the market (that is "with the values of currencies") in order to avoid large (very large!) arbitrage situations.

So regardless of the "relationship" of the other currencies to each other, the AUD segment of the market will reflect the true value of the currency in terms of the value of the others.


Can you explain how it weakens? that it has fallen so far can be seen on the chart - where will it go next on the next candle? (if you know, then a basket of one pair is enough)
 
Tantrik:

Can you explain how it is getting weaker? that it has been falling so far can be seen on the chart - where will it go next on the next candle? (if you know, one pair is enough)
Actually, that's what I was trying to say.
 
OnGoing:

Wrong, the whole market is not tied to one kangaroo. And apart from the yen, the franc could also go down. Then you will have to wait a long time to at least break even.

Your idea of equilibrium and a closed market is not confirmed in practice. Hence, by the way, the conclusion that either you do not trade by this TS, or you've just started and had great luck so far.

Reasonable skepticism is good.
However, I deliberately wrote "PRACTICAL closed-loop system", leaving room for factors I did not consider. It doesn't matter how many or what currencies go where, I repeat - it doesn't matter!
What matters is the market value of the currency we trade, and it (the value) is made up of the rates of the others against it.
It is not interesting, but it is a fact: the market value of each of the "others" is 1/7 of the total. So you have to be a complete idiot to "fail to guess" at least 4 out of 7.

 
Avals:

So you are saying that currency indices are more trending than individual currencies?
...rather than currency pairs.
 
granit77:
... That is, if I am confident of the Aussie falling, I will also make money on one pair, ....
yes? on a pair of what? and this "what" will stand still and wait for you to make money???
 
moskitman:
...rather than currency pairs.
is that a guess or do you have some statistics?
 
Tantrik:

Can you explain how it is getting weaker? that it has been falling so far can be seen on the chart - where will it go next on the next candle? (if you know, a basket of one pair is enough)
The fact that it has fallen so far can only be seen on seven charts at once, and that with their reciprocal movement.
 
Still, could you show us a graph of the AUD index you calculated for clarity?
 
OnGoing:
Still, could you show us a graph of the AUD index you calculated for clarity?
AUD specifically has nothing to do with it at the moment. In general, I use cluster indicators.
I've shown and told you everythinghere.
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