Just a quick question - If you become indirectly exposed to a cross currency pair can you determine the breakeven point by looking at the cross currency pair that would determine when both trades on the two pairs that made the synthetic pair would both go into loss and both go into profit.
For example buying gbpusd and selling usdjpy you become exposed to gbpjpy.
The reason I ask is if these two trades were entered at different times of the day or on different days ; (ie if one was to take the two entries and someone average them according to the dollar pip value ), in doing so - you would be able to pinpoint the area on the cross pair chart ( gbp jpy ) where both trades would become a loss or profit ( in theory )
I can imagine this would be quite useful for doubling up on exposure through the currency pair by exiting the indirect exposure or vv by exiting one pair's exposure and entering into the cross pair directly.
I can imagine this would also be quite useful to analyse in terms of percent aswell: for example if gbpjpy goes down 0.5% from the created line on the chart ( call it profit / loss line ) then if you had a visual of the percent move from the two pairs you are in to make up gbpusd you could see the ratio of which pair is moving faster.
For example gbpusd could move 0.3% while usdjpy only 0.2%.
If this was achievable to analyze and that if my logic is correct this would be quite valuable.
Does anyone agree ? and moreover is this even logically correct or possible?
I have been able to link mt4 to excel to analyze live dollar pip values and create indicators however In the past I have spent long hours doing so.
If it is possible I'd encourage someone to create such an indicator with me and I also invite discussion around this topic.
Does this idea / concept verge into basket trading?
cheers, Jon
For example buying gbpusd and selling usdjpy you become exposed to gbpjpy.
The reason I ask is if these two trades were entered at different times of the day or on different days ; (ie if one was to take the two entries and someone average them according to the dollar pip value ), in doing so - you would be able to pinpoint the area on the cross pair chart ( gbp jpy ) where both trades would become a loss or profit ( in theory )
I can imagine this would be quite useful for doubling up on exposure through the currency pair by exiting the indirect exposure or vv by exiting one pair's exposure and entering into the cross pair directly.
I can imagine this would also be quite useful to analyse in terms of percent aswell: for example if gbpjpy goes down 0.5% from the created line on the chart ( call it profit / loss line ) then if you had a visual of the percent move from the two pairs you are in to make up gbpusd you could see the ratio of which pair is moving faster.
For example gbpusd could move 0.3% while usdjpy only 0.2%.
If this was achievable to analyze and that if my logic is correct this would be quite valuable.
Does anyone agree ? and moreover is this even logically correct or possible?
I have been able to link mt4 to excel to analyze live dollar pip values and create indicators however In the past I have spent long hours doing so.
If it is possible I'd encourage someone to create such an indicator with me and I also invite discussion around this topic.
Does this idea / concept verge into basket trading?
cheers, Jon