Could you please post your excel sheet , I am not good with formulas
Thank you
Thank you
DislikedGBP is moving faster not only because is worth more, there are another factors too - one of that is liquidity of pair.
I did some research some time ago about pair traiding (not fx pair but two different equitis, futures etc). Pro often use normalized divergence of pairs.
One calculate average of pair div (price), next calc average of div between this average (between avg and pairs price div) and divided it by standard deviation of it. This sound complicated but it isn't - I did it in Excel but it's easy to programm it. I attached some scans form book "The handbook of pairs trading" by Douglas S.Ehrman. Btw this is interesting book if one is interested in pair traiding.
Regards,
AndrewIgnored