Hi,
Okey i am unsure about some things... maybe there is someone who know these things in and out.
Well, you don't need to be a math genious to realize that if you know the values of x/y and z/y you can easily get the value of z/x as well. But i am not sure how it actually happens in real life with forex pairs.
Imagine that both gbp/usd and eur/usd for some short time moves sharply in one way... but eur/usd moves quite a bit more than gbp/usd. As we know price changes because of supplay and demand, so that to correct eur/gbp there should be need for some artifical supplay/demand. Well.. who wouldn't like to do this if they can make money of this, huh?
Question) Who makes sure that this works like that? Banks? HFT? You? Me?
Okey, now lets consider eur/gbp. Volume is somewhat decent, but compared to eur/usd and gbp/usd the volume is very very small.
Now, it would make sense to me that eur/gbp and gbp/usd work as leading pairs and eur/gbp as lagging, because of the volume difference. So i have that kind of feeling when looking at eur/gbp chart that what i am actually looking at is a bit of actual, and quite a bit a consequence of eur/usd and gbp/usd.
When i see a rise in eur/gbp... i could say that buyers stepped in.... but what might actually be the case is that buyers stepped in eur/usd more than they stepped in gbp/usd.
Question) Best way to use corsses?... if use them at all?
Okey i am unsure about some things... maybe there is someone who know these things in and out.
Well, you don't need to be a math genious to realize that if you know the values of x/y and z/y you can easily get the value of z/x as well. But i am not sure how it actually happens in real life with forex pairs.
Imagine that both gbp/usd and eur/usd for some short time moves sharply in one way... but eur/usd moves quite a bit more than gbp/usd. As we know price changes because of supplay and demand, so that to correct eur/gbp there should be need for some artifical supplay/demand. Well.. who wouldn't like to do this if they can make money of this, huh?
Question) Who makes sure that this works like that? Banks? HFT? You? Me?
Okey, now lets consider eur/gbp. Volume is somewhat decent, but compared to eur/usd and gbp/usd the volume is very very small.
Now, it would make sense to me that eur/gbp and gbp/usd work as leading pairs and eur/gbp as lagging, because of the volume difference. So i have that kind of feeling when looking at eur/gbp chart that what i am actually looking at is a bit of actual, and quite a bit a consequence of eur/usd and gbp/usd.
When i see a rise in eur/gbp... i could say that buyers stepped in.... but what might actually be the case is that buyers stepped in eur/usd more than they stepped in gbp/usd.
Question) Best way to use corsses?... if use them at all?