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The next step is to look at each ring, and determine if it has a dominant component(s). This is done by comparing the pip costs for each of the 3 pairs, then comparing the maximum pip cost to the minimum. The ratio is the relative weight of the pips for the ring. Ring: USD-EUR-CHF balance: 1.20 domi...

The first step then is to know the pip costs per pair back to your native currency, in this case USD. Here are the costs I used: USD 1.000 CHF 0.832 GBP 2.520 JPY 0.820 AUD 0.878 CAD 0.956 NZD 0.791 So you look at a pair, suppose EURAUD, and take the pip cost for the 2nd currency in the pair, in thi...

In practice I wanted to mention that there is a fact about the FPI that I don't think has been mentioned. It is that when you trade between FPI extremes, your results will be either diminished or enhanced, depending on whether or not your net transaction went with the dominant currency pair. For exa...