On the unequal probability of a price move up or down - page 142
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I'll talk about tomatoes, you talk about cucumbers ... :)
Let's imagine the situation - USDJPY jumps in the wrong direction during the Asian session. A loss appears in the pairAUDJPY/USDJPY. When will the convergence occur it is unknown may be as TC in a fortnight ... I analyze the charts in the morning and see, for example, thatAUDUSD/EURUSDhas a profit that exceeds the loss on the JPY pair - so I close, because I don't need to wait long. So that's diversification! Yes, the pairs are poorly chosen for the example, but I think I have explained it clearly in a hypothetical way.
P.S. It is possible not to close, but to wait. Because another pair will close in profit and I will have means for further work. And this pair should wait to the end of the world...
Did I get that right? Did you enter these pairs today?
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About Price Unequal Probability to Go Up or Down
Vitaly Muzichenko, 2020.01.27 22:48
Well I've shown you the "basis", you tradeAUDJPY/USDJPY=AUDUSD tradewith Yen only. Here yourself calculate right now the profit/loss on both pairs, and then turn on theAUDUSDchartand calculate from the opening to now the virtualprofit/loss. I think you will see for yourself.
P.S. I have already done the math.AUDJPYyou are buying,USDJPY you are selling.
I think so:
I have been invited by an American broker to hold a webinar at the European branch in January, I am still thinking about it, but I will probably take 40-50 minutes in the first half of February, if I do not change my mind.
I will explain and show you everything.
I've learned so many times that it's all so useless... ...sometimes it's a pity for my time.
I keep telling them that entering in two pairs of one currency is cross trading, but it costs more, but they still do not get it. They sit there with smart faces and calculate lots. Bullshit! Enter the cross and you don't need any smart calculations.
But the ability to flexibly control the reins as if they were left and right when riding a horse, by adding, averaging or flipping separately in each leg to get out of a drawdown may be considered as some kind of advantage compared to cross trading?
But the ability to flexibly manage both left and right reins when riding a horse, by refilling, averaging or flipping separately in each leg to get out of a drawdown can be considered some kind of advantage over trading crosses?
It can't. I told you that back in 2016
P.S. This kind of trading is like when the horse is behind the cart and you are in front steering the drawbar on the cart :)You can't. I told you that back in 2016.
P.S. This kind of trading is like when the horse is behind the cart and you are in front steering the drawbar on the cart :)And I would compare trading cross to riding a horse that is controlled by one reins).
And I would compare cross-country trading to riding a horse that is controlled by one reins).
There's two there too, just less load on the horse. Who prevents you from averaging, or refilling on the cross?
Well, do you agree that trading the pound and the quid in pairs has an advantage over trading the pound alone or the euro alone?
I don't quite understand the question
There's two there too, just less load on the horse. Who prevents you from averaging, or refilling at the cross?
Consider this hypothetical situation. Suppose the EUR and GBP synchronously, keeping the distance between them, constantly fluctuate in a horizontal corridor with the same amplitude and keeping the spread between them constant. The cross will stand still and you have a cross position with some loss. If it swings that way for a month, it means that your position on the cross will be at a loss for a month. And in paired trading, you can create a skew in this situation by doubling the lot on one leg. The equity of the profitable leg will exceed the equity of the losing leg and the combined position may close with a profit.
Let us consider a hypothetical situation. Suppose the EUR and GBP, synchronously, keeping the distance between them, constantly fluctuate in a horizontal corridor with the same amplitude and keeping the spread between them constant. The cross will stand still and you have a cross position with some loss. If it swings that way for a month, it means that your position on the cross will be at a loss for a month. And in paired trading, you can create a skew in this situation by doubling the lot on one leg. The equity of the profitable leg will exceed the equity of the losing leg and the combined position may close with a profit.
Or it may be caught on the reversal and result in a loss. We do not consider pure hypotheses because it cannot happen. We trade realities. The cross does not stand still.