Absolute courses - page 46
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This is because when we see the evolution of USD pairs we cannot immediately understand the PRIORITY of that movement. If "dollar pairs" of the USD*** type go up, it does not mean that the USD is becoming more expensive. It is the same with the Euro. Hence the confusion.
I agree with that. The question that remains unclear is whether other currencies included in dollar pairs are going up or down.
But I still don't understand how you arrived at the true value of a unit currency. I think it is possible to do so by estimation, but even if it succeeds, it is not certain that the inertia in unit currency movements will persist, nor is the appearance of the unit currency graph and the internal dependencies in it unclear.
What makes you think the indexes should correlate?
That's the whole point. Otherwise take any curve arbitrarily and the other two from primitive arithmetic. And what's the point?
P.S. They must correlate precisely because I am tired of explaining the physics of the process. Paper trash changes its value SYNCHRONICALLY (the curves where you get sharp jumps not by percentages but by a lot - the instability of the calculation model is nothing more). Synchronously, equally, correlated by 100%. And then there are slight differences in how a single piece of junk paper depreciates in value and determines its price compared to other junk. The euro versus the yen, for example.
That's the whole point. Otherwise, take any curve arbitrarily and the other two from primitive arithmetic. And why?
Suppose the indices correlate close to 1. How then do you get restored quotes instead of wandering around 1?
Suppose the indices correlate close to 1. How then do you get recovered quotes instead of wandering around 1?
didn't catch the question.
...it is not certain that inertia in the movement of unit currencies will persist...
I have revised my understanding of the physics of this from earlier posts. There is no inertia, it's the elastic stresses and you have to bet against them. If we see the dollar rising and the euro falling it means that soon it will be the other way round. If there were no inverse processes, the exchange rates would fall apart, but over many years EURUSD is around 1,3, USDCAD is around 1, etc.
Explain how you get corr=1 if currencies are moving in DIFFERENT directions at any given time?
Colleague, come on. I'm making a HYPOTHESIS (logical, by the way, what's so surprising about the fact that paper money somehow moves more or less equally in relation to the real stuff; the dollar and the ruble have been hovering around 30 rubles to the dollar for a decade) that currencies move in ONE direction, synchronously (the general form), but with minor differences which ONLY FORM THE FORM OF RELATIONSHIP GRAPHICS. For myself, I have already implemented a multi-currency analysis, requiring not the correlation of three currencies, but of a dozen currencies, the correlation of E, D, Y, P, ... 10, 1 (almost one), with all the other similar conclusions. I haven't posted it here yet, and there's no reason to. In essence the results are similar, so we can show here the tricks of profitable trades as it is.
JonKatana, is it?
Excuse me?