Disliked{quote} @Robot Trader -- regarding correlated pairs, something else occurred to me. Let's take EURUSD and USDCHF -- very high reverse correlation, right? But if you were to monitor their fraction ADR they would parallel one another most of the time (since ADR does not take into account direction) -- which isn't too interesting. On the other hand, it could be that on those rare occasions when they don't track with one another then that's when a signal occurs that you want to take note of. I don't know -- I'm just saying this because I don't want...Ignored
But there are variables because the Mean is dynamic (so both pairs will not be returning to where they started, there will be a new Mean) and which was the dominant pair which took them out of sync, so maybe the ADR might give a clue to which was the more dominant pair.
I trade them by opening a Buy/Sell and look for them to return to the dynamic Mean, but on a equal lot size basis (neither pair are weighted to offset the dominant pair) apart from allowing for the Forex account currency.
So would your type of ADR Histogram Indicator looking at pairs A & B give any additional information about the dominant pair and how better to trade it.
Some people say I'm lucky, but the more I practice the luckier I get
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