Discussing the article: "Multiple Symbol Analysis With Python And MQL5 (Part 3): Triangular Exchange Rates"
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Check out the new article: Multiple Symbol Analysis With Python And MQL5 (Part 3): Triangular Exchange Rates.
Traders often face drawdowns from false signals, while waiting for confirmation can lead to missed opportunities. This article introduces a triangular trading strategy using Silver’s pricing in Dollars (XAGUSD) and Euros (XAGEUR), along with the EURUSD exchange rate, to filter out noise. By leveraging cross-market relationships, traders can uncover hidden sentiment and refine their entries in real time.
For readers who are possibly new to the school of thought around cross-market patterns, we will provide a brief introduction into the topic, so you may appreciate why some traders will tell you these cross-market patterns are typically predictable, and if you can get them right, they have the potential to be robust.
Around 90% of the world’s commodities are priced in American Dollars. But, some commodities are so commonly traded, they are often quoted in several currencies at once.
Precious metals, like Silver, are typically quoted in both American Dollars and Euros at the same time. We will focus on Silver as our example for today. One may find that his broker offers quotes of the price of silver in Dollars (XAGUSD) and in Euros (XAGEUR) simultaneously.
If we want to trade XAGUSD, and we know that it is fundamentally connected to XAGEUR, how can we leverage this understanding to our advantage, to accept or reject trading opportunities that are offered to us, without having to wait indefinitely for confirmation?
By factoring in the prevailing exchange rate between Euros & Dollars (EURUSD), one may be able to form a triangular trading strategy, that finds predictable patterns forming between the price of Silver in Dollars, Euros and the fair rate of exchange of Euros to Dollars (EURUSD). We aim to equip the reader with a trading strategy that is robust to noise and can help uncover "hidden" market sentiment from ordinary market quotes received in your MetaTrader 5 Terminal.
Author: Gamuchirai Zororo Ndawana