I posted this in my Journal, but thought it would be useful for a broader audience. Attached is an Excel spreadsheet that shows the calculated price relationships between the 7 majors and 22 crosses....a snapshot of the spreadsheet is shown below. Basically, the spreadsheet shows how the rate for

Please note that in several calculations, you need to take the reciprocal of the rate data. For example, to calculate the following rate data for:

EURJPY x CHFJPY = EURCHF

You need to take the reciprocal of CHFJPY:

EURJPY = 133.53

CHFJPY = 122.95 = 1/122.95 = 0.0081

133.53 x 0.0081 = 1.0861 = EURCHF

At the time of the above calculation, the bid on EURCHF = 1.0860

Hope that some folks find this useful....

Dave

__any__given currency pair can be calculated from many different pair sets, i.e. the mathematical dependency between all pairs. The exchange rate data is from late October, but you can input current exchange rate data if you wish.. I posted this because when reading through the forums, it seems that some traders are under the impression that exchange rates are completely independent of one another...not true...Please note that in several calculations, you need to take the reciprocal of the rate data. For example, to calculate the following rate data for:

EURJPY x CHFJPY = EURCHF

You need to take the reciprocal of CHFJPY:

EURJPY = 133.53

CHFJPY = 122.95 = 1/122.95 = 0.0081

133.53 x 0.0081 = 1.0861 = EURCHF

At the time of the above calculation, the bid on EURCHF = 1.0860

Hope that some folks find this useful....

Dave

Attached File

Mathematical Relationship between Forex pairs.xlsx 22 KB | 1,039 download