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  • #1,061
  • Aug 24, 2010 9:35pm Aug 24, 2010 9:35pm
Quoting DXTrade
LOL... I teach diving all day today... so not really time as well.

But I would be surprised if you can find an example of a secondary pair where the multiplication of the majors doesn't work.

Other example: EURUSD - USDCHF
These pairs are moving in a pretty precise inverted direction.
That's why the multiplication gives a similar result at all times, and that's why the EURCHF nearly ever moves far.

But if you have an example... I'm open to learn

Don't want to enter in an argument here... sorry
The issue is we are trading currencies not having math class. If I buy 1 lot of aud/nzd and one lot of nzd/usd and 1 lot of aud/usd. I have three distinct and totally different trades that can do what ever they wish. I buy aud/usd and I sell nzd/usd and what ever on the aud/nzd. The trades will not correspond in the results. The aud may go 50 pips profit, the nzd 50 pips profit but the aud/nzd will do nothing. They did not equal the aud/nzd in price action. I once had a guy send me a formula that if you but 3 of one and 2 of the other that would be the same as buying the aud/nzd. Yes the math may work but that has nothing to do with price action.

If the US govt. sells 1000 GMC army trucks to Australia. At some point there is a currency transaction. A sale that big would affect the market in some degree but it only affects the aud/usd not nzd/uzd or aud/nzd. The market moves but are not coordinated when that transaction goes down. Each currency pair is independent from each other even though they can move similar at times. You do not know what business is being done between two countries and you cant relegate it to a math formula. That is my point.
  • #1,062
  • Edited 10:08pm Aug 24, 2010 9:58pm | Edited 10:08pm
Yes, But....

The buyer of that truck would have the option to use other methods of obtaining the currency he has to pay for the transaction with. You've assumed he can only make the AUDUSD deal but if it is cheaper to do two deals eg GBPAUD and GBPUSD to raise the USD to pay for the trucks then this is what the buyer would do. This is why the other currencies pairs are affected by a large transaction between two currencies.

Arbitrage opportunities (ie. when the pure maths doesn't work) are very few and far between in fx.

If the deal is done the inefficient way and a distortion from the pure maths happens it'd likely be a very brief occurence. Arbitrage opportunities are constantly monitored and someone else would benefit very quickly (milliseconds?) and return the rates to the pure ratios.

Believe the maths has huge inertia and distortions hammered out so quickly best to just think pure maths is correct.

Knoxy
Aspice, officio fungeris sine spe honoris amplioris
  • #1,063
  • Aug 24, 2010 10:36pm Aug 24, 2010 10:36pm
Quoting nanningbob
The issue is we are trading currencies not having math class. If I buy 1 lot of aud/nzd and one lot of...
I absolutely agree...
The point is: the AUDJPY price is a result of the AUDUSD multiplied USDJPY. Right?
So if the AUD is affected by a buy of trucks from USD then the AUDJPY will automatically change and be affected as well. No way around it. Because AUDJPY = AUDUSD x USDJPY... always! And that is pure math... the truck deal will influence the price of AUDJPY although the Yen has nothing to do in this deal at all.

I like these discussions
"The only successful substitute for brains is silence."
  • #1,064
  • Aug 24, 2010 11:44pm Aug 24, 2010 11:44pm
Quoting DXTrade
I absolutely agree...
The point is: the AUDJPY price is a result of the AUDUSD multiplied USDJPY. Right?
So if the AUD is affected by a buy of trucks from USD then the AUDJPY will automatically change and be affected as well. No way around it. Because AUDJPY = AUDUSD x USDJPY... always! And that is pure math... the truck deal will influence the price of AUDJPY although the Yen has nothing to do in this deal at all.

I like these discussions
Only in price equation not in price action. The truck deal doesnt affect how the aud/jpy moves only the usd/jpy price movement. The movement affects the exchange rate that is true but it does not affect price action. That is how I understand it.
  • #1,065
  • Aug 24, 2010 11:52pm Aug 24, 2010 11:52pm
To me leverage has little to do with trading. If I use 10-20% of my funds to do my trading with. That remains the same whether I have 500:1 or 100:1. Now I trade with 500:1 but the key to me is the amount of funds used compared to total account size. If I have 2000 in my account and my DD starts running 4-500 dollars, then I am looking to add to my account. Whether I have 100:1 or 500:1 doesnt change whether I am 4-500 dollars down. It does matter if I get over 30-40% because my account will start disappearing quickly on a fast move but whether I am 100:1 or 500:1 wont make much difference at that point. It is one of the reasons I changed my 2.4.2 to 1.1.3. I keep my DD much lower that way as far as funds go and I can stretch my self pip wise on bad moves. That is why jpy move doesnt bother or surprise me at all. gbp/jpy and eur/jpy are quite volatile so I give them room. You can check the weekly, monthly charts and see that the run is either already exhausted or almost exhausted. So I will trade on.
  • #1,066
  • Aug 24, 2010 11:53pm Aug 24, 2010 11:53pm
some simple thoughts from a primary student of this class

Say EURUSD and EURJPY

if
eur go strong
and usd same
and jpy same
then
eurusd and eurjpy will go up


if
eur go strong
and usd go strong
and jpy same
then
eurusd will not move
and eurjpy will go up.

if eur go strong
and usd go weak
and jpy go super strong
then
eurusd will go up
and eurjpy will go down

so i believe that jpy has nothing to do with eurusd. or maybe forex is not really that simple.
  • #1,067
  • Aug 25, 2010 12:35am Aug 25, 2010 12:35am
Sorry guys
don't want to cluster this thread... will be my last post concerning this subject... promised

As illustration below 2 charts: AUDUSD and AUDJPY
Not exactly superposable... but still...

P.S. I unconditionally love your system, BOB!
Attached Image(s) (click to enlarge)
Click to Enlarge Name: au.gif Size: 16 KB
Click to Enlarge Name: aj.gif Size: 14 KB
"The only successful substitute for brains is silence."
  • #1,068
  • Aug 25, 2010 2:01am Aug 25, 2010 2:01am
Quoting Mixer
Are you saying that Alpari wont allow me to go to a lower leverage?

When i just opened the account, they told me the leverage was 1:500 and the first thing i did before trading was to change the leverage to 1:100.
Mixer, with Alpari UK you can now open a Micro account online if you have a Classic, and you can transfer money between them on line and instantly. And leverage can be 1:100 as you said.

I have done this and will trade this system only on the Micro for now.
  • #1,069
  • Aug 25, 2010 2:08am Aug 25, 2010 2:08am
This is beautiful I'm currently experimenting similar system but without the indicators etc and just by watching swing highs and lows. I get caught out if the trend continues but I think these indicators will help me to keep out. I will spend more time this weekend on this. Thanks Bob.
  • #1,070
  • Aug 25, 2010 3:06am Aug 25, 2010 3:06am
Which brings me to 2 other nice charts

The first one is the normal template where I put some checkmarks in aqua at the entry points I might have traded. The blue one is a limit one as he is too close to the green line.

For the second chart I just took off all the indicators and only left the checkmarks...

Would that have been too hard to find without any indicator?

Up - Down - Up - Down... the trend is your friend if you trade against it
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: au2.gif Size: 25 KB
"The only successful substitute for brains is silence."
  • #1,071
  • Aug 25, 2010 5:41am Aug 25, 2010 5:41am
Hi Guys,

I wonder how can this happen. The current price equals the SL but the trade didn't close. Have you guys experienced this before? This is a demo account in FXOpen.
Attached Image (click to enlarge)
Click to Enlarge Name: SL never hit.JPG Size: 83 KB
  • #1,072
  • Aug 25, 2010 5:46am Aug 25, 2010 5:46am
Quoting luiboy
Hi Guys,

I wonder how can this happen. The current price equals the SL but the trade didn't close. Have you guys experienced this before? This is a demo account in FXOpen.
What about the spread ?? you should add it to the price shown on MT4 which is the BID not the ASK....
  • #1,073
  • Aug 25, 2010 5:57am Aug 25, 2010 5:57am
Quoting T1stmilfx
What about the spread ?? you should add it to the price shown on MT4 which is the BID not the ASK....
Is it like that? But for my live account in liteforex the prices shown are spread inclusive.
  • #1,074
  • Aug 25, 2010 6:15am Aug 25, 2010 6:15am
Did you notice FX Sol. lowered their spreads and they're still fixed. Sure hope Dodd-Frank doesn't screw with US. citizens with UK. accounts.
  • #1,075
  • Aug 25, 2010 6:41am Aug 25, 2010 6:41am
Quoting luiboy
Is it like that? But for my live account in liteforex the prices shown are spread inclusive.
You have to include the spread which is now the ask price. When the ask price hits the SL then it will trigger. You do not get the price you get price plus the spread. When you enter a trade at 1.00 and the spread is 3 then your line is really 1.03 and it stays at that spread all the way through the trade. When price gets to .97 then you are at breakeven at 1.00
  • #1,076
  • Edited 6:53am Aug 25, 2010 6:43am | Edited 6:53am
Quoting Toothman
Did you notice FX Sol. lowered their spreads and they're still fixed. Sure hope Dodd-Frank doesn't screw with US. citizens with UK. accounts.
Yes but they added some kind of daily charge called a premium fee. Some currencies have a plus and some a minus. I dont understand it yet but it appears that the swap is becoming a separate accounting charge. Dont know what it is yet.
  • #1,077
  • Aug 25, 2010 6:59am Aug 25, 2010 6:59am
Quoting DXTrade
Sorry guys
don't want to cluster this thread... will be my last post concerning this subject... promised

As illustration below 2 charts: AUDUSD and AUDJPY
Not exactly superposable... but still...

P.S. I unconditionally love your system, BOB!
But there are a dozen other crosses that wont match up. For example the USD/JPY doesnt match either one yet you try to match them together through the AUD.
  • #1,078
  • Aug 25, 2010 7:26am Aug 25, 2010 7:26am
Quoting nanningbob
Yes but they added some kind of daily charge called a premium fee. Some currencies have a plus and some a minus. I dont understand it yet but it appears that the swap is becoming a separate accounting charge. Dont know what it is yet.
Bob, the premium fee is the swap. It's not an additional fee.
  • #1,079
  • Aug 25, 2010 10:22am Aug 25, 2010 10:22am
Quoting nanningbob
Yes but they added some kind of daily charge called a premium fee. Some currencies have a plus and some a minus. I dont understand it yet but it appears that the swap is becoming a separate accounting charge. Dont know what it is yet.
I don't understand the +/- either but from my understanding I believe for each day you hold the position then there is a charge. I also use GFT and what they do is at the end of each trading day (based off 7 pm EST) they close your position and reopen so they make a profit from the bid/ask spread again. Essentially it is like an interest charge for the margin you're using.

On another note, I'm absolutely getting killed by eurchf right now. Setting all time lows it seems.
  • #1,080
  • Aug 25, 2010 10:37am Aug 25, 2010 10:37am
Quote
On another note, I'm absolutely getting killed by eurchf right now. Setting all time lows it seems.

Likewise, good time to practice the old recovery system!
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