Pair trading and multicurrency arbitrage. The showdown. - page 237
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That's not interesting.) It's myfxbook. I subtract one thing from another. There's no money in it, it's a load of rubbish. I don't know why I spent so much time, I'd rather draw levels and triangles.
Have you found the grail? Tell me, because we are all looking for it, but for some reason it is not on the market, it looks like we are looking in the wrong place. Open a secret secret please.
1000% made in 8 months. Good luck, everyone.
I'll just leave it here instead of my notebook :-)
On the axes - quotes EURUSD , GBPUSD; in the centre of the picture - point current rate. Tangent to it = EURGBP.
In blue - deflation axes (growth of quotations, not changing ratios, just inflating the picture).
growth/decline of EUR/GBP, i.e. revaluation of EUR and GBP relative to each other with min. fluctuation with USD - along the green line.
Similarly with EUR/USD and GBP/USD - they do not go along straight lines either.
If you think that EUR is undervalued in USD it is optimal not only to buy EUR/USD but also to sell a little GBP
buying/selling exclusively one pair is not optimal
funny pictures, part 2
in the presented coordinates, the paired deal is marked by a green vector, its direction is determined by the EUR,GBP ratio in the deal.
Thearea where we will be in plus is marked inblue. The parabola along the vector of the deal is the area where the profit is optimal. Of course, it is ideal for the price to be exactly on the vector (this is the maximum profit/time), but it does not happen.
The supposed deal was opened according to the forecast"euro grows". The price does not walk linearly, and especially along the axes - there will always be a curved trajectory, the Euro will grow to USD (orange line is directed upwards), and to GBP (tangent is growing), it is assumed that the pound will pull up. And the dollar is falling to both of them - the bend of the line is directed from the origin of coordinates.
That's why the target, the green oval is always shifted to the side and the best method to "get into it" is paired trading, only a deal with two pairs (three currencies) can correctly direct the green vector.
it is even worse with closings :-)
Fantasies.
What do you mean?
funny pictures are in general elementary projection geometry. Projection of eurusd/t gbpusd/t charts into eurusd/gbpusd slice with explanations on their reading :-)
the only difficulty in reading is that the gbpusd cross becomes an additional radial axis,tangent.
What are you talking about?
funny pictures are in general elementary projection geometry. Projection of eurusd/t gbpusd/t charts into eurusd/gbpusd slice with explanations on their reading :-)
the only difficulty in reading is that the gbpusd cross becomes an additional radial axis,tangent.
The pictures come out very nice and informative. Sps. Interesting.....
you are always welcome :-)
and informative pictures ,
by the way, quite originally show the long-term trend of EURGBP - as a direction of spiral turns. Right-twisted, left-twisted. Up or down.
If you look at such a chart - the price is in an ellipse with one axis directed to the centre. Mostly visible movements to/from the centre. Because on the axes of measurement in USD (on one axis euro/dollar, on the other pound/dollar), and mainly it is the quid that is cancelled.
The long term drift in EUR/GBP will manifest itself according to the rules of the "borax".
...
The long term drift in EUR/GBP will manifest itself according to the rules of the "boomerang".
Nice.
By the way, what program was used for drawing?
I'll just leave it here instead of my notebook :-)
On the axes - quotes EURUSD , GBPUSD; in the centre of the picture - point current rate. Tangent to it = EURGBP.
Blue - deflation axes (quotes growth, not changing ratios, just inflating the picture)
growth/decline of EUR/GBP, i.e. revaluation of EUR and GBP relative to each other at min. fluctuation with USD - along the green line.
Similarly with EUR/USD and GBP/USD - they do not go along straight lines either.
If you think that EUR is undervalued in USD it is optimal not only to buy EUR/USD but also to sell a little GBP
buying/selling exclusively one pair is not optimal
That's brilliant. But sell a little bit of GBP 'how much in grams?