There still appears to be many misunderstandings where this strategy is concerned. The confusion seems to be not only why this stratgey works, but how to implement it. Those that do not understand how it is implemented, assume it is a non-functioning strategy.
I have been trading successfully with this strategy for over 4 years now and haven't deviated from it once. Not only do I find it to be successfull, but it is also the most CONSISTENT strategy I have ever utilized. Consistency is what turns part time traders into full time traders.
I am a technical trader that reacts to market conditions, and I never
try to predict anything. I do not attempt to forecast the direction the market will move.......I simply trade with it in the direction it chooses to go.
I know when the US Economic reports are and simply
trade the results. Trading both EUR/USD and CHF/USD allow me to trade profitably regardless of the outcome of the report. It is an absolutely simple and non stressful way to trade. Utilizing the right indicators make this a no-nonsense strategy that can be used any time of the day, during any trading day of the week, in any trading session. Its clear when to buy and its clear when to get out.
As far as EUR/CHF is concerned, you are right in that to calculate arbitrage for these pairs, EUR/USD is divided by the inverse of USD/CHF [EUR/CHF = EUR/USD / USD/CHF^-1]. However, my strategy has nothing to do with arbitrage, because I do not buy EUR/USD and USD/CHF at the same time, nor do I offset any position with a respective EUR/CHF position.
If you look at weekly pltted charts of all three pairs,
EUR/USD, USD/CHF & EUR/CHF, you'll see, as either pair quoted with USD
increases the other decreases. This is mainly due to three things, the
quote style, the USD fluctuations, and the economic policies of The
European Union and Switzerland.
The net change of EUR/CHF is very small, though there are some
noticeable fluctuations; there is miniscule arbitrage possibilities with
these pairs. However, looking at the percentage change of EUR/USD and
USD/CHF, you will see the symmetrical swings with these pairs and
trading opportunities.
What I am trying to relay is that when the EUR/USD quotes rise, I buy
into that volatility. I then take my profits and then buy the USD/CHF
volatility. I am placing buys on both pairs, just not at the same time
and sometimes not even on the same time compression.
Do understand, that this is a much more shorter time frame strategy. Although it can be used with longer time frames, it works amazingly well for day traders, scalpers and those who want to enter a trade, lock in their profits and get out the same day.
I have been trading successfully with this strategy for over 4 years now and haven't deviated from it once. Not only do I find it to be successfull, but it is also the most CONSISTENT strategy I have ever utilized. Consistency is what turns part time traders into full time traders.
I am a technical trader that reacts to market conditions, and I never
try to predict anything. I do not attempt to forecast the direction the market will move.......I simply trade with it in the direction it chooses to go.
I know when the US Economic reports are and simply
trade the results. Trading both EUR/USD and CHF/USD allow me to trade profitably regardless of the outcome of the report. It is an absolutely simple and non stressful way to trade. Utilizing the right indicators make this a no-nonsense strategy that can be used any time of the day, during any trading day of the week, in any trading session. Its clear when to buy and its clear when to get out.
As far as EUR/CHF is concerned, you are right in that to calculate arbitrage for these pairs, EUR/USD is divided by the inverse of USD/CHF [EUR/CHF = EUR/USD / USD/CHF^-1]. However, my strategy has nothing to do with arbitrage, because I do not buy EUR/USD and USD/CHF at the same time, nor do I offset any position with a respective EUR/CHF position.
If you look at weekly pltted charts of all three pairs,
EUR/USD, USD/CHF & EUR/CHF, you'll see, as either pair quoted with USD
increases the other decreases. This is mainly due to three things, the
quote style, the USD fluctuations, and the economic policies of The
European Union and Switzerland.
The net change of EUR/CHF is very small, though there are some
noticeable fluctuations; there is miniscule arbitrage possibilities with
these pairs. However, looking at the percentage change of EUR/USD and
USD/CHF, you will see the symmetrical swings with these pairs and
trading opportunities.
What I am trying to relay is that when the EUR/USD quotes rise, I buy
into that volatility. I then take my profits and then buy the USD/CHF
volatility. I am placing buys on both pairs, just not at the same time
and sometimes not even on the same time compression.
Do understand, that this is a much more shorter time frame strategy. Although it can be used with longer time frames, it works amazingly well for day traders, scalpers and those who want to enter a trade, lock in their profits and get out the same day.
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