michal.kreslik wrote: No pair can explicitly be declared as the source of inefficiency in the FPI ring. As Forex traders, we know that the majors are dragging the cross pairs behind. But from the mathematical point of view, it can't be said that some particular pair (for instance, a major pair) is the source of an inefficiency.
It's because the inefficiency in the FPI ring is formed as a product of all involved pairs' values. The pairs' values are measured against each other. Saying that some pair in an FPI ring contributes more to the inefficiency mathematically would be like saying that some particular vertex of a triangle contributes more to the total area of the triangle than any of the other two vertices.
Thanks, Michal. Am aware that mathematically it is the whole fraction which generates the setup and can appreciate if your focus remains concentrated on that. At a practical level, an inefficiency is created when at least one pair in a ring temporarily lags or leads in the auction creating a momentary extreme in the fraction. Was just wondering if you had, while staying in the context of the ring and FPI, done any work with the individual players. Like:
Done any distributions on which members are the rascals most often ?, etc.
Do rings having members with wider spreads have higher frequencies of inefficiencies? etc
Please believe me, I am not unconsciously drifting towards legging in and out of rings. But it may be possible, during certain conditions in an inefficiency, that a trader or system only has to go for timely and great fills on one or two pair in a ring instead of great fills on all the pairs in the ring etc. Thoughts ??