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Is this logical ?

  • #1
  • First Post: Jul 24, 2007 4:40am Jul 24, 2007 4:40am
Seeing the signals a few days ago, I placed a short trade on the EUR/JPY and a few minutes later a long trade on the GBP/JPY.
It then struck me that I should be just trading long on GBP/EUR for double the effect?? But I couldn't see any signals to go long on this pair. Should I just trade it anyway?
  • #2
  • Jul 24, 2007 5:00am Jul 24, 2007 5:00am
I maybe wrong but your observation is not correct, you will not be left with GBP/EUR

EUR/JPY and GBP/JPY does not = EUR/GBP as with

EUR/USD and USD/CHF = EUR/CHF
  • #3
  • Jul 24, 2007 5:14am Jul 24, 2007 5:14am
Quoting hardhead
Seeing the signals a few days ago, I placed a short trade on the EUR/JPY and a few minutes later a long trade on the GBP/JPY.
It then struck me that I should be just trading long on GBP/EUR for double the effect?? But I couldn't see any signals to go long on this pair. Should I just trade it anyway?
Sure . If you are "short EURJPY and long GBPJPY" you are actually short EURGBP or long GBPEUR

Should you trade this or not its up to you !
  • #4
  • Jul 24, 2007 5:15am Jul 24, 2007 5:15am
Also please mind that 1 lot in each currency pair represents different monetary values.
  • #5
  • Jul 24, 2007 5:27am Jul 24, 2007 5:27am
It doesn't really matter what order the pair is in.

You sold the E/J so you sold EUR and bought JPY.

You bought the G/J so you bought GBP and sold JPY.

So if you had bought the GBP/EUR, you would have bought GBP and sold EUR, I think that would be the same, the JPY cancels out.

I think it also seems logical that there should have been a long signal on that pair if the other conditions were true. Seems like there should be correlation.
  • #6
  • Jul 24, 2007 5:48am Jul 24, 2007 5:48am
Quoting blueruby
It doesn't really matter what order the pair is in.

You sold the E/J so you sold EUR and bought JPY.

You bought the G/J so you bought GBP and sold JPY.

So if you had bought the GBP/EUR, you would have bought GBP and sold EUR, I think that would be the same, the JPY cancels out.

I think it also seems logical that there should have been a long signal on that pair if the other conditions were true. Seems like there should be correlation.
tx blueruby, .... never to old to learn.
  • #7
  • Jul 24, 2007 6:52am Jul 24, 2007 6:52am
Quoting hardhead
Seeing the signals a few days ago, I placed a short trade on the EUR/JPY and a few minutes later a long trade on the GBP/JPY.
It then struck me that I should be just trading long on GBP/EUR for double the effect?? But I couldn't see any signals to go long on this pair. Should I just trade it anyway?

I´m not an expert, but I´m going to say what Í had watched on the pairs.

Eur/Usd and GBP/USD usually goes on some way.

Eur/USd and USD/CHF on oposite ways.

When there are some fact or fundamentals that values Yen, all pairs that have Yen as counterpart moves on some way. (Down)

Eur/GBP: If Eur/usd moves up and GBP/USD stops or down some pips, Eur/GBP moves up (valuation of Eur)
If Eur/USD moves down or stops and GBP/USD up, Eur/GBP, moves down (Revaluation of GBP)

Eur/Yen, It´s compicated, (This pair i don´t understand very good yet) because, when Eur go up, this pair go up, and sometimes when usd/Yen go up Eur/Yen, go up too.

CHF/Yen, the opposite way USD/CHF

AUd/USD, the opposite way Eur/AUD

This is what I´m watching.

But one thing i learned, on this market, and as we say...... logic is a potato......

Good luck everyone
  • #8
  • Jul 24, 2007 7:00am Jul 24, 2007 7:00am
This is an interesting link. I don't use it heavily, but I do try to keep correlation in mind somewhat so that, for example, I'm not short G/U and short E/U at the same time in a way that would violate position sizing rules.

http://www.mataf.net/en/forex/tradin...elation/table/
  • #9
  • Last Post: Jul 24, 2007 7:26am Jul 24, 2007 7:26am
Quoting hardhead
Seeing the signals a few days ago, I placed a short trade on the EUR/JPY and a few minutes later a long trade on the GBP/JPY.
It then struck me that I should be just trading long on GBP/EUR for double the effect?? But I couldn't see any signals to go long on this pair. Should I just trade it anyway?
Short EUR/JPY = EUR expected to lose value against JPY.
Long GBP/JPY = GBP expected to increase value against JPY

Therefore, shouldn't GBP increase value against EUR, even more?

If I'm already in the Short EUR/JPY trade and it is looking OK, and decide to also long GBP/JPY, then if my signals are correct, long GBP/EUR should produce even bigger returns than just long on GBP/JPY.
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