DislikedThis is great stuff Forex1man. Forget the naysayers. Please keep writing I am most interested in what you are writing here.
Not sure if you have tried this yet, but I'll definitely fiddle with it....is taking the 2 pairs and working out the stochastic movement of the 2 pairs combined as one to see what the relationship is to the GBPJPY stochastic. This would provide you with a better visual of how much lead, if any you have on the GBPJPY. Might make for an interesting forecasting tool.
It would make sense if the GBPJPY is following the lead of the 2 pairs, that the stochastic movement of the combination would lead as well....without calculating it out completely, there should be equal moves but an offset in the time.
As in A*B=C where C lags A*B by t seconds
therefore
Stochastics (A*B) = Stochastic (C) where stochastic (A*B) leads stochastic (C) by t seconds
So plotting Stochastic (A*B) on one graph and Stochastic (C) on another graph should only vary by the offset in t seconds.
Interesting to see if t seconds is a constant or what variance there is to that lead in time and if it is of any use for trading.Ignored
places in your trading of it, that will now hopeful be helpful. Example: Hopefully you are not going to go short gbp/jpy if you notice the usd/jpy and gbp/usd are moving up together, or the opposite on down. I do have some more to share and a few unique ways of taking advantage of the opportunities and finding the opportunities to trade this concept with when it happens. I will be adding small bits all weekend time allowing...