Hi all
I have an idea and want to see what your opinions are. most of us know that EUR/USD and USD/CHF are in almost perfect correlation with each other. In fact, they are 99% in unison. I attached a pic of both pairs on a monthly time frame to illustrate this. It goes back for a few years and you can see that they are oppiste. Where one goes up the other drops.
So any way I was thinking that there has to be a way to exploit this. So i was thinking and playing with the thought of what if we were to buy both pairs. What you would do is buy (for example) 1 lot of EUR/USD and buy 1 lot of USD/CHF. Now put a stop loss of 65 for both and a target profit of 75 for both. Adjust for your spreads so it equals 10 pips. Pretty much every time you will get 10 pips a day. When one of the pairs hits your stop loss the other one hits your T/P shortly after.Now there are days when neither one will hit the stop loss and hit your target profit instead. And then there are also days where your Stop is hit and not your target profit. but those days are very very seldom and make up for each other. Also if none of your targets are hit for that day. Don't do a thing, just wait for them to hit the next day. place your trade at the beginning of each session and check back at the close the next day.This idea works the best on a daily time frame.
Put both charts up and back test them and you will be surprised.
let me know what you all think
Ed
I have an idea and want to see what your opinions are. most of us know that EUR/USD and USD/CHF are in almost perfect correlation with each other. In fact, they are 99% in unison. I attached a pic of both pairs on a monthly time frame to illustrate this. It goes back for a few years and you can see that they are oppiste. Where one goes up the other drops.
So any way I was thinking that there has to be a way to exploit this. So i was thinking and playing with the thought of what if we were to buy both pairs. What you would do is buy (for example) 1 lot of EUR/USD and buy 1 lot of USD/CHF. Now put a stop loss of 65 for both and a target profit of 75 for both. Adjust for your spreads so it equals 10 pips. Pretty much every time you will get 10 pips a day. When one of the pairs hits your stop loss the other one hits your T/P shortly after.Now there are days when neither one will hit the stop loss and hit your target profit instead. And then there are also days where your Stop is hit and not your target profit. but those days are very very seldom and make up for each other. Also if none of your targets are hit for that day. Don't do a thing, just wait for them to hit the next day. place your trade at the beginning of each session and check back at the close the next day.This idea works the best on a daily time frame.
Put both charts up and back test them and you will be surprised.
let me know what you all think
Ed
Attached Image (click to enlarge)
"Do or do not, there is no try"
