Currency trades selection

rossored

Senior member
2,086 48
First post in quite some time...

I thought I might try to revive some sensible talk on trading here on the boards, currency pairs and the odd Index trade, as has been my bag for some time. Let's get the questions out of the way first.

1) No, I'm not selling anything; I've been a member of the site for many years and have no agenda
2) Yes, I have a system and no, I'm not going to share it with you
3) All the trades posted here are either with a live SB account or live with another FX provider, and no, I'm not prepared to tell you the position size
4) Charts posted are on a 2 min timescale
5) I'm not posting every single trade and they'll all be done towards the end of the day

The purpose of the thread is just to invite some talk and participation. I'll post both winners and losers.

So, two trades today. A USDJPY winner and a EURUSD loser.

First trade, long USDJPY (winner)

t1 entry.png
t1 exit.png

Second trade, long EURUSD (loser)

t2 entry.png
t2 exit.png


Anyone else want to join in?
 
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gka

Established member
697 5
Thank you for your charts.

FX pairs come in triplets. Arbitrage keeps the triplets together. So

EURGBP X GBPUSD = EURUSD

GBPUSD X USDJPY = GBPJPY

I have found with the method I use (described in the first post of the thread " Predicting future FX support and resistance levels using mathematics" Volatility Response Model, that all three FX pairs of a triplet are coordinated. They move about their corresponding VRM levels in a coordinated fashion so I can tell which FX pair is leading, following or just watching.

Do you chart all 3 FX pairs in a triplet to make your final trade decision?
 

gka

Established member
697 5
No.

If they are co-ordinated, why would a trader even need to do that?
Let's call your charting method the "rossored method" or RRM for short. Then let's take the following triplet

EURGBP X GBPUSD = EURUSD

If the RRM says buy EURGBP and buy GBPUSD and sell EURUSD then this cannot be true. Two ups don't make a down.

Similarly If the RRM says sell EURGBP and sell GBPUSD and buy EURUSD then this cannot be true. Two downs don't make an up.

For choosing the most profitable FX pair consider the following:

If the RRM says buy EURGBP and sell GBPUSD and sell EURUSD then EURUSD is following the GBPUSD and GBPUSD must be the big mover. Any upward movement of the EURGBP must be cancelled by the even bigger downward movement of the GBPUSD

Similarly if the RRM says sell EURGBP and buy GBPUSD and sell EURUSD then EURUSD is following the EURGBP and EURGBP must be the big mover. Any upward movement of the GBPUSD must be cancelled by the even bigger downward movement of the EURGBP

There are two more scenarios which follow the same logic.

That's why I think you have to analyze all three FX pairs in a triplet for any method of analysis used. Arbitrage keeps the components of a triplet in check.
 

rossored

Senior member
2,086 48
Let's call your charting method the "rossored method" or RRM for short. Then let's take the following triplet

EURGBP X GBPUSD = EURUSD

If the RRM says buy EURGBP and buy GBPUSD and sell EURUSD then this cannot be true. Two ups don't make a down.

Similarly If the RRM says sell EURGBP and sell GBPUSD and buy EURUSD then this cannot be true. Two downs don't make an up.

For choosing the most profitable FX pair consider the following:

If the RRM says buy EURGBP and sell GBPUSD and sell EURUSD then EURUSD is following the GBPUSD and GBPUSD must be the big mover. Any upward movement of the EURGBP must be cancelled by the even bigger downward movement of the GBPUSD

Similarly if the RRM says sell EURGBP and buy GBPUSD and sell EURUSD then EURUSD is following the EURGBP and EURGBP must be the big mover. Any upward movement of the GBPUSD must be cancelled by the even bigger downward movement of the EURGBP

There are two more scenarios which follow the same logic.

That's why I think you have to analyze all three FX pairs in a triplet for any method of analysis used. Arbitrage keeps the components of a triplet in check.
Well, yes I agree with you there GKA - if you were trading 2 or 3 matched pairs simultaneously, any trade entry would need to correlate across those pairs; however, in the time I've been trading this system, I've never seen a signal on even two currencies, related pairs or otherwise, at the same time, so I doubt it will be an issue.

Are you trading a system yourself and if so, does it require correlation across these same pairs?
 

gka

Established member
697 5
Well, yes I agree with you there GKA - if you were trading 2 or 3 matched pairs simultaneously, any trade entry would need to correlate across those pairs; however, in the time I've been trading this system, I've never seen a signal on even two currencies, related pairs or otherwise, at the same time, so I doubt it will be an issue.

Are you trading a system yourself and if so, does it require correlation across these same pairs?

Yes I trade a system called the Volatility Response Model (VRM) described in the first post of the FX thread " Predicting future FX support and resistance levels using mathematics". I always look at the three components of a triplet to make a final trading decision. Every calculation made by the VRM should be consistent.
 

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