Spreads Formula

[tommog]

There are often people asking "what is the spread code for" ....

I was wondering if someone could post the formula for working this out so we can apply it to whatever market we wish to trade and not need to ask for specific market cases.

Am I right in thinking that to CHART a spread you divide the ATR of Market A by the ATR of Market B to get the chart ratio.

And (ATR Market A x Tick Value) / (ATR Market B x Tick Value) to get the hedge ratio?

Thanks

 

[inktomii]

There is no general formula. It depends what you want to spread and how you want to spread it. Price hedged, volatility hedged...