# Calculation needed for trading FOREX – 2 currency pairs

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169
2012.09.30 17:42

I am going to trade 2 currency pairs: USD/CHF and CHF/JPY.

I need to calculate how many lots of the second currency I need to balance my trade.

If I take USD/CHF as one lot then how many lots I will need of the second currency pair to make even balance.

Currencies move (fluctuate) in a certain range over period of time. To make my strategy complete I need to work out trading range. They (those 2 currency pairs) have different trading ranges.

Over a period of time USD/CHF has been trading in a range: 0.96770 – 0.99830

Over a period of time CHF/JPY has been trading in a range: 78.150 – 83.980

The trading range has to be added and calculated (translated to lots) together with the previous calculation to work out how many lots of the second currency I have to buy for trading to make a balanced trade.

Is it possible to make these calculations in Excel or maybe in some other program?

I hope that I have explained it clearly. If you need more clarifications please ask.

John.

4480
2012.10.01 01:24

HI;

I THINK :

1) YOU MUST STUDY ABOUT CORRELATION BETWEEN CURRENCY PAIR  ( CORRELATION IS NOT 100% )

2)  VALUE OF AMOUNT:

Profit or Loss= (Sell Price – Buy Price) * (Amount)

----------------------------------------------------------------

EX:

EUR/USD
Sell Price= 1.2744
Contract Size= 0.5 Lot or 50K
Profit or Loss = (1.2744 – 1.2717) * 50000= 135\$

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169
2012.10.01 12:55

Hello,

Thank you for your reply. And thanks for the example, but that's not what I asked for.

I need this calculation for trading correlated currency pairs.

I studied correlation between currency pair. I have been trading for a long time. Now I trade correlated currency pairs and for the first time I  am actualy winning.

My strategy works but to help me make more acurate and quick decision I need that currency pair calculation. Can anyone help?

Waiting for replies.

John

4480
2012.10.01 13:46

hi;

very nice idea ;

if you reach to any result ;

by.

4
2013.04.17 22:28
JohnCobb:

I am going to trade 2 currency pairs: USD/CHF and CHF/JPY.

I need to calculate how many lots of the second currency I need to balance my trade.

If I take USD/CHF as one lot then how many lots I will need of the second currency pair to make even balance.

Currencies move (fluctuate) in a certain range over period of time. To make my strategy complete I need to work out trading range. They (those 2 currency pairs) have different trading ranges.

Over a period of time USD/CHF has been trading in a range: 0.96770 – 0.99830

Over a period of time CHF/JPY has been trading in a range: 78.150 – 83.980

The trading range has to be added and calculated (translated to lots) together with the previous calculation to work out how many lots of the second currency I have to buy for trading to make a balanced trade.

Is it possible to make these calculations in Excel or maybe in some other program?

I hope that I have explained it clearly. If you need more clarifications please ask.

John.

You have to take knowledge of Correlation, generally correlation means relationship in between two variables , as I  heard there are two kind of correlation positive and negative correlation. For more you can contact currency online for getting services related to correlation.

2372
2013.04.25 19:37
As far as my wisdom says, you won't have a perfect correlation (an absolute 1.00 or 100%) because of the spreads. And sometimes, correlation between pairs (such as GBPUSD and USDJPY) doesn't hold true.
16
2013.04.26 03:41

Moderator
30742
2013.04.26 08:57
fxmelvin:

Hello,

• When you have a question, don't post it to an unrelated topic, you can create your own.
169
2014.05.02 14:07
TIMisthebest:

hi;

very nice idea ;

if you reach to any result ;

by.

Almost 2 years later and YES, my strategy works. Made stedy profit trading on small amounts, but you need patience.
4480
2014.05.02 14:18
JohnCobb:
Almost 2 years later and YES, my strategy works. Made stedy profit trading on small amounts, but you need patience.

hi;

wish the best for you