DislikedI am curious about something- and have been for a while:
Newstrader posted this whole thing about the relationship of GJ to its pairs ie: Since you obviously don't know-i'll tell you.
GBP/JPY = GBP/USD x USD/JPY. The price of G/J equals the price of G/U times the price of U/J.
That's how u make the big pips trading G/J-when ur in a nice sustained carry trade trend...
I keep thinking about this and don't understand the big deal. I would expect all crosses to have this relationship. I finally actually looked at some other crosses and find this to be true. I am curious if any math majors out there could explain to me why this relationship would NOT be true. It just seems to be a natural occurence.
Any input would be appreciated.Ignored
Imagine all the pairs as resting on counter weighted scales that are all connected to each other like a giant spider web of forex.
When one is influenced by external forces, it pushes and pulls on the others but not in equal proportion. Some it moves more than others and some much less....but it moves them regardless. If even only a couple of points.
The whole market is inter-connected and externally connected to other markets with the same type of influential connection.
There is no such thing as an isolated, self regulating forex pair....or market for that matter.
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