I know very little about "basket trading". My understanding is that by trading a basket you have the ability to smooth out fluctuations in a single currency's movement.
I have an indicator that is fairly solid on profits but is a little volatile on drawdowns.
The indicator works on EURUSD and GBPUSD.
Does it make any sense to trade a basket of currencies in the same direction? Should I trade both the long and short of that basket and if so what should the lot sizes be?
Say I received a long signal for EURUSD, should I as an example
Buy - EUR/USD
Buy - AUD/JPY
Sell - GBP/JPY
Buy - USD/CAD
Sell - EUR/CHF
Sell - NZD/CAD
Buy - GBP/AUD
Buy - NZD/CHF
Any help would be great!
Thanks
I have an indicator that is fairly solid on profits but is a little volatile on drawdowns.
The indicator works on EURUSD and GBPUSD.
Does it make any sense to trade a basket of currencies in the same direction? Should I trade both the long and short of that basket and if so what should the lot sizes be?
Say I received a long signal for EURUSD, should I as an example
Buy - EUR/USD
Buy - AUD/JPY
Sell - GBP/JPY
Buy - USD/CAD
Sell - EUR/CHF
Sell - NZD/CAD
Buy - GBP/AUD
Buy - NZD/CHF
Any help would be great!
Thanks