Absolute courses
Good afternoon.
I would like to raise this topic. We know the exchange rates of currency pairs. For example EURUSD, or GBPUSD.
What does it mean - it is a graph of one currency (euro, for example) in relation to some benchmark (another currency, for example, the Fed dollar).
Postulate 1: no currency or currency basket has the right to be a standard, because its value, unlike units of physical units, is not a constant; on the contrary, it is constantly changing.
Thus, we do not see a graph of the EUR itself, but a graph of the RELATION RELATION to a VARIABLE (dollar), and we do NOT KNOW or understand what is responsible for this or that movement of the EURUSD rate, be it the euro itself or the dollar.
Postulate 2: to build a profitable and stable TS we need to understand the reasons for price changes in the currency pair (in the particular case of the euro we need to understand which changes are due to changes in the euro, and which changes are due to changes in the dollar).
Conclusion 1: it is necessary to build EUR charts not in relation to the dollar or another currency or currency basket, but in relation to what has the right to be a reference, i.e. not to change.
Conclusion 2: The euro can be taken as a benchmark in any bar in the past. And plot the ratio of the euro in the present to itself in a fixed bar in the past. Similarly with all other currencies.
P.S. I would like to see a couple of meaningful comments before I continue.
? better not go on :)
a lecture on the subject
Conclusion 2: You can take the euro in any bar in the past as a benchmark. And plot the ratio of the euro in the present to itself in a fixed bar in the past. Similarly with all other currencies.
point 2 is not entirely clear, especially the highlighted one:
I realise I don't get it, but what I don't get I don't get...
How can a currency in any past bar be a benchmark for itself or anything at all!
Author, can some basic postulates of this theorem be voiced?
A very simple idea. Choose a value that does not change over time, but is fixed once as a benchmark. Let's say we have chosen a moment in time. Let's assume that USD=1 (if it seems more beautiful to someone, it does not matter), EUR=1,3300 (for example) at the same moment in time, and so on. Then we plot the changes of the currencies themselves to their values in the benchmark bar. These "real" exchange rates (absolute, as it is called in the branch subject) will show the REAL change of them, and not the EVIDENTAL, VISIBLE, FALSE one that we see on currency RELATIONSHIPS. And then we can draw many interesting conclusions.
There is no difference. You have simply divided the exchange rate of a pair by a constant.
I realise I don't get it, but what I don't get I don't get...
How can a currency in any past bar be a benchmark for itself or anything at all!
Author, can some basic postulates of this theorem be voiced?
That's the thing, you can't define a benchmark for a currency. You could equate it to gold, but it's already done... And what do you mean by a benchmark? In your example, the benchmark must not change, that is, remain unchanged over time ... In today's rapidly evolving world, the benchmark must constantly change ... Another question, what is the benchmark?
Can the benchmark for the euro be taken as the average of all pairs with the euro ???? Euro quid + Euro pound .... + euro yen / n.... we get the euro value (as if it is the world price compared to all currencies).
and use this average price as the basis for the chart.
A very simple idea. Choose a value that does not change over time, but is fixed once as a benchmark. Let's say we have chosen a moment in time. Let's assume that USD=1 (if it seems more beautiful to someone, it does not matter), EUR=1,3300 (for example) at the same moment in time, and so on. Then we plot the changes of the currencies themselves to their values in the benchmark bar. These "real" rates (absolute, as it is called in the branch subject) will show the REAL change in them, and not the SEEMING, VISIBLE, FALSE one that we see on currency RELATIONSHIPS. And then we can draw many interesting conclusions.
It's nothing, I've tried it. Nothing better than Semen Semenych's cluster indicator I haven't got for 3 years.
makes some sense if the system is closed loop.
For example, there are only 2 assets: shares and money. Suppose the traders have a combined total of 100 shares, and 1000 units of money. If the sum of money and shares does not change, then the "fair"/equilibrium price will be about 10 per share. If the price is higher, there won't be enough for all the shares to change hands (money shortage), if it's lower, everyone won't be able to buy shares at that price (stock shortage). If money is added to the system, there will be an inflationary increase, if shares are added, there will be a decrease as with additional issues.
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Good afternoon.
I would like to raise this topic. We know the exchange rates of currency pairs. For example EURUSD, or GBPUSD.
What does it mean - it is a graph of one currency (euro, for example) in relation to some benchmark (another currency, for example, the Fed dollar).
Postulate 1: no currency or currency basket has the right to be a standard, because its value, unlike units of physical units, is not a constant; on the contrary, it is constantly changing.
Thus, we do not see a graph of the EUR itself, but a graph of the RELATION RELATION to a VARIABLE (dollar), and we DO NOT KNOW or understand what is responsible for this or that movement of the EURUSD rate, be it the euro itself or the dollar.
Postulate 2: to build a profitable and stable TS we need to understand the reasons for price changes of the currency pair (in the specific case of the euro we need to understand which changes are due to changes in the euro, and which changes are due to changes in the dollar).
Conclusion 1: it is necessary to build EUR charts not in relation to the dollar or another currency or currency basket, but in relation to what has the right to be a reference, i.e. not to change.
Conclusion 2: The euro can be taken as a benchmark in any bar in the past. And plot the ratio of the euro in the present to itself in a fixed bar in the past. Similarly with all other currencies.
P.S. I would like to see a couple of meaningful comments before I continue.