Demonstrating the cluster approach to market... - page 7

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If, for example, EURUSD is going up, while GBPUSD is going down and EURJPY is going down, the weight of EURUSD should be less than the weight of the other two pairs, IMHO. That's why I decided to do it without scales. When I was working with 4 currencies it was obvious, that while one currency was growing, the other was falling down. When I switched to 7 currencies, this effect practically disappeared.
 
sab1uk >> :

let's assume that the eurodollar pair is influenced by other pairs.

i hope it is clear to everyone that different pairs may not have the same degree of influence

so why does Semenych average oscillator signals (i.e. gives equal weights)?

I do not pretend to be right, I see approximately such weights:


If we take EURUSD movement for the analysis, then, according to Semen Semenych, it is necessary

Calculate the "cluster values" of EUR and USD.

Let the cluster (the market) consist of 8 (eight) currencies - "EUR", "GBP", "AUD", "NZD", "CAD", "CHF", "JPY", "USD".


The "cluster value" of the currency EUR will be determined by the "demand" for that currency from the other 7(seven) currencies.

In order to calculate this "demand" from the other 7(seven) currencies in the cluster, we need to have the following tools:

1. "EURUSD", 2. "EURGBP", 3. "EURAUD", 4. "EURNZD", 5. "EURCAD", 6. "EURCHF", 7. "EURJPY".

An increase/decrease in each of these instruments leads to an increase/decrease in the "cluster value" of the EUR currency.
The question is posed as follows:

"Suppose the eurodollar pair is influenced by other pairs

That different pairs cannot have the same influence...".

However, for the sake of correctness, the question should be put like this:

"The degree of influence on the cluster value of the EUR currency by each of the other 7(seven) currencies in the cluster,

realised through the seven(7) instruments listed above, will depend on the instrument through which, in fact,

this influence is exercised through."


The following formula is proposed to estimate the impact of a particular instrument on the "cluster value" of EUR:

[(New_instrument_price/Old_instrument_price) - 1]/Instrument_point_value (i.e. Point)


The value thus obtained will be added to / subtracted from the "cluster value" of the EUR currency.


How do you feel about such a scheme ?

Can you suggest, for your part, a scheme for calculating this effect of an instrument on the "cluster value" of a particular currency?

 

traders do not trade on a single currency but on a pair

each pair has its own spread and trading volume

I do not see the spread in the formula

 
Cost_item_instrument - there is a function of the exchange rate, it turns out to be buttery.
 
sab1uk >> :

Traders do not trade in a single currency but in a pair

Quite right. Let's go back to the EURUSD in question.

From my previous post we can see that at each time we have a "cluster value" of the currency EUR.

To calculate the "cluster value" of the USD currency we need, as in the previous case, to calculate the "demand"

for USD from the other 7(seven) currencies in the cluster. This "demand" is manifested through such 7(seven) instruments:

1. "EURUSD", 2. "GBPUSD", 3. "AUDUSD", 4. "NZDUSD", 5. "USDCAD", 6. "USDCHF", 7. "USDJPY".

Here, increase/decrease of the first 4(four) instruments results in decrease/increase of the "cluster value" of USD,

growth/decrease of the last 3(three) instruments results in increase/decrease of the "cluster value" of USD.


As before, the decrease/increase in the "cluster value" of USD currency is proposed to be calculated using the formula I provided in the previous post.


Thus, we now have a "cluster value" for USD as well.

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Now we can return to EURUSD as an object of trade.

However, we will consider not a usual simple instrument EURUSD(Base_Currency_Quotes), but such a "cluster instrument":


(EUR_C_Cluster_Value USD_C_Cluster_Value).


When, for example, the "cluster value" of EUR starts to exceed the "cluster value" of USD, we open on EURUSD instrument upwards...

Presented by me indicator CL1i.mq4 shows the difference of "cluster prices" between left and right currency of the instrument, on which this indicator opens.

And regarding the spread, in my opinion, it's not a big deal...


But the formula for calculating the degree of influence of an instrument on the "cluster value" of a currency, I myself have my doubts....

 
voidpiligrim >> :
Instrument_item_value is a function of the currency rate, resulting in butter.

The instrument point value is the minimum possible change in the currency of the instrument quoted.

 
sab1uk >> :

traders do not trade on a single currency but on a pair

each pair has its own spread and volume of trades

I do not see the spread in the formula

based on this the size of the spread affects the value of the quote of the instrument ? how do you understand ?

 
keekkenen писал(а) >>

how do you understand that the size of the spread affects the value of the instrument quote?

There are forward and backward quotes. if you want to get the cluster right, you have to flip something. and if you flip it, then the ask and bid are reversed. you tried it and .... >> We joined those who ask for more normal story storage format, there is no asc and spread is floating.

 
ssd >> :

And as for the spread, in my opinion, it is such a trivial thing to talk about...


And here's a formula for calculating the extent to which an instrument affects the 'cluster value' of a currency, I myself have my doubts....



The triviality is the abstract cluster value and the spread is an important detail of the 'Potential Return on the Instrument'.

 
If the spread is taken into account, then just take the arithmetic average of the buy and sell price, otherwise the direct quote is not equal to the reverse.
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