Jalarupa wrote:newscalper wrote:Jalarupa wrote:="newscalper"]
Yeah I know I was short and long dollar at the same time
I've been watching this arbitrage for a while... You definitely had the right idea but sad to say you are about a week late to the party...
Are you talking about correlation or arbing? I wasn't talking about arbing - I just mentioned that yes I did realise I was long and short dollar at the same time - same as trading the cross.
I've a few indies for correlation tried using them a LOOONG time ago as an entry tool. Even at the 5 minute level they're not much help because at the time you should be entering guess what?
You were engaged in an arbitrage play by trading long/short Dollar - and I was showing you that it did work very well a few weeks ago... When the Pound was rising and the Yen was falling in tandem...
Technically if you had entered into that trade say 3 weeks ago and held it until now you would be very well hedged as the two pairs started to decouple from one another this week...
In terms of correlation I am busy working on teaching myself to eyeball price action on three pairs while looking to place complimentary trades on two of them as I have noticed that in cross currency pairs three interrelated names will generally move 2 up 1 down or the other way around... The key for me is to try and identify which two are are leading price action forward and place complimentary trades on them... A great example of this was seen this morning in Cable and Yen Crosses
Weakness in Cable dragging GBPJPY lower and USDJPY Higher
Then Cable stalls at demand and USDJPY drags GBPJPY even lower...
Exactly, so as I said it was exactly the same as trading the cross of the two GBP/JPY. The rest of it - way over my head atm