Hi,
I'm a newbie and would like to ask something that has been bugging my mind.
Why are the GBPJPY pair the most volatile pair in the market? I know for one thing that this is a carry trade pair, but in the forum, I've found this answer accidentally when searching for ATR.
The poster bluebuddha is no longer available/active and I would like to know whether the above statement is true or not, and I'd appreciate if anybody could give me a specific calculation/logic on how this situation can happen.
Thanks.
Marcel
I'm a newbie and would like to ask something that has been bugging my mind.
Why are the GBPJPY pair the most volatile pair in the market? I know for one thing that this is a carry trade pair, but in the forum, I've found this answer accidentally when searching for ATR.
QuoteDislikedThe reason why the GBPJPY throws a lot of pips each day is because you need a lot of margin to buy/sell the lead currency (GBP) and get little return on the secondary currency (JPY). This is the same reason why EURGBP seems to "go nowhere". If you look at the percentage returns per pip multiplied by the ATR, it's probably the same as EURUSD or any other highly traded cross. Raw pips mean nothing if the return per pip is low.
The poster bluebuddha is no longer available/active and I would like to know whether the above statement is true or not, and I'd appreciate if anybody could give me a specific calculation/logic on how this situation can happen.
Thanks.
Marcel