Thoughts on some of the absurdity of multi-currency analysis. - page 24
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Now the question. Getch argues that there is a tight link and looks at it in terms of these formulas.
EURGBPask = EURUSDask / GBPUSDbid
EURGBPbid = EURUSDbid / GBPUSDask
Yeah, my mistake. I took a lowe instead of a clowes. Doesn't change the point.
Doesn't change anything...
What changes then?
My keyboard's just dead. I'll give you all the arguments tomorrow.
then this relationship should be visible at the height of the daily candle for these pairs - demonstrate please
I don't know what "height level" is, and the height of a candle can be understood in any way (i.e. maybe someone should take high-low, instead of open-close). So I do it straightforward, without any geometry (let's assume, we need to calculate EURGBP movement, knowing other two movements): we enter (+EURUSD/-EURGBP/-GBPUSD), taking into account multiplication of signs for entry direction and delta we have profitsloss in pips: -978 (usd pips) -x (gbp pips) - 417*0.82 (usd pips), 0.82 stands as a ratio normalizing the lot, we get 342; in total x (gbp pips) = 1320 (usd pips), where x = 1320 / 1.5 = 880 (rounded calculations).
I don't know what "height level" is, and the height of a candle can be understood in any way (i.e. maybe someone should take high-low, instead of open-close). So I do it straightforward, without any geometry (let's assume, we need to calculate EURGBP movement, knowing other two movements): we enter (+EURUSD/ EURGBP/-GBPUSD), considering multiplication of entry direction and delta signs we have profitsloss in pips: -978 (usd pips) -x (gbp pips) - 417*0.82 (usd pips), 0.82 stands as a ratio normalizing the lot, we get 342; in total x (gbp pips) = 1320 (usd pips), wherefore x = 1320 / 1.5 = 880 (rounded calculation).
You see, there's a normalization factor = 0.82
there is a rough calculation
i know that the eu is often tied to the pound, but i don't see the reason to take it as an axiom, the dollar will go down in tendency and i may have to do it again
I think I will make an EA using this formula and let it work out. I understand that one may take an arbitrary bar and count pairs' run and that run should be always the same.
... I'll give you all the arguments tomorrow.
We'll wait.
I'll give you my arguments in the meantime.
I understand what you're saying, and with these indexes and synthetic courses, I got all worked up, nothing worked out. Until I understood one thing, the one I knew, the one I was taught. I'll try to explain it on the example of an aeroplane. In order to determine how it flies and where it flies, you make calculations in 12 coordinate systems (at least), they are relative and absolute, spherical, polar, related, etc. And often it turns out that in one coordinate system, it flies uniformly and in a straight line, while in the other it rotates... this is the theory of relativity, if you think that you are not moving, you are mistaken, if you look at you from any satellite from the constellation of vega, the trajectory of movement will be mama...
And so here, everything depends on how we calculate this course=index=value of this object. If you build it the way I do, in the example I gave.
(0.00978, 0.00879,0.00367) these rate changes may be completely unrelated to EUR,USD or GBP movements, but due to AUD changes (it was falling). These calculations are two orders of magnitude more complicated than Semen Semenych's, but they are worthwhile.
Seems nonsense, but don't be put off by looking at how the AUD is moving today...
Doesn't change anything...
What changes then?
S.S. The keyboard just died, I'll give you all the arguments tomorrow.
In fact, let's move on :))
we cannot, knowing two figures, calculate a third.
I'm a little confused here... What third figure are we talking about?
Knowing the opening and closing of EURUSD and GBPUSD, you can easily calculate the opening and closing of EURGBP
Knowing the opening and closing of EURUSD and EURGBP, you can easily calculate the opening and closing of GBPUSD
Knowing the opening and closing of EURGBP and GBPUSD it is easy to calculate the opening and closing of EURUSD
Agreed?
I know what you mean, and with all those indexes and synthetic courses I got all worked up, nothing worked out. Until I understood one thing, the one I knew, the one I was taught. I'll try to explain it on the example of an aeroplane. In order to determine how it flies and where it flies, you make calculations in 12 coordinate systems (at least), they are relative and absolute, spherical, polar, related, etc. And often it turns out that in one coordinate system, it flies uniformly and in a straight line, and in the other it rotates... this is the theory of relativity, if you think that you are not mobile, you are mistaken, if you look at you from some satellite from the constellation of vega, the trajectory of movement will be mama...
Agreed
It's the same here, it all depends on how we calculate this rate=index=price of this facility. If you build as I do, in the example I gave.
(0.00978, 0.00879,0.00367) this rate change may be completely unrelated to EUR,USD or GBP movement, but due to AUD change (it was falling).
I disagree. Theoretically, if AUD falls, EURAUD will go up, GBPAUD will go up, EURGBP will not change anything, that's all...
Theoretically, the market is complex and the consequences of the fall of AUD may be more complicated, but it does not change the matter.
These calculations are two orders of magnitude more complicated than Semen Semenych's, but they are worth it.
It seems nonsense, but don't be put off by looking at how the AUD is moving today...
So? It's moving and moving, it was moving yesterday too.
So I don't see any absurdity of multicurrency analysis.
For example, the candlestick on GBPUSD closed with a big rise. How can you tell if the GBP is rising or the USD is falling? No way!!..Only by analyzing the crosses with other currencies like EURGBP, GBPJPY, etc. you can check if the GBP is rising, in fact, the news about UK GDP came out at 12-30 and the GBP was rising against all currencies, without changing the USD/EUR rate, the USD fell only against the GBP, or rather the GBP rose against the USD.