Balanced and diversified FX management.

[lovethetrade]

Hello lovethetrade, no they are not necessary and at one point I was balancing across Eur/gbp, Eur/Jpy, Eur/usd, Gbp/Jpy, Gbp/usd and Usd/jpy only. The problem with that was I was consolidated across less pairs. It's not perfect now, but I believe better, even though it can be slightly weighted into Usd or Eur more than the others. In an environment where the average person has zero hedge and fully weighted into their country of origin, I believe it is better.
Thanks for the question.

That doesnt really answer my question. Why do you want to balance across more pairs just for the sake of it? By including a highly correlated pair you're doubling your EUR exposure compared to all other pairs in your portfolio which doesnt make sense if your objective is to minimise and balance risk.

 

[DepthTrade]

That doesnt really answer my question. Why do you want to balance across more pairs just for the sake of it? By including a highly correlated pair you're doubling your EUR exposure which doesnt make sense if your objective is to minimise and balance risk.

Hello again lovethetrade, I would agree with you except for my unit/ usd exposure. This is not equal across the board. The positioning risk-size is balanced as opposed to out right numerical balance.

 

[MrMuppet]

Can't win them all. Let's see how year end PnL is looking with my live account vs your SIM.

He's contributing, you're heckling.
I don't care if it's SIM or not, it's an interesting concept and different to the basic trendline/indicator/orderflow/politics/"quant" based bullshit the imbeciles on ET post all the time.

This tickles my brain. So would you mind to shut up, pretty please? Unless you want to shill your product...but even then you could open your own thread

 

[DepthTrade]

That doesnt really answer my question. Why do you want to balance across more pairs just for the sake of it? By including a highly correlated pair you're doubling your EUR exposure compared to all other pairs in your portfolio which doesnt make sense if your objective is to minimise and balance risk.

I will also say pair correlation is subjective to a time frame and even then it ebbs and flows out of those correlations.

 

[fan27]

He's contributing, you're heckling.
I don't care if it's SIM or not, it's an interesting concept and different to the basic trendline/indicator/orderflow/politics/"quant" based bullshit the imbeciles on ET post all the time.

This tickles my brain. So would you mind to shut up, pretty please? Unless you want to shill your product...but even then you could open your own thread

I originally replied to this thread in good faith. Certainly the OP can handle what he decided to dish out.

 

[DepthTrade]

Have rebalanced and legged into additional positions.

 

[DepthTrade]

Hello everyone, have rebalanced and added some more weight to the over all position value. Up to 77k now.

 

[HobbyTrading]

@DepthTrade I have little knowledge about balancing a forex basket. Can you explain how you calculate that?

 

[DepthTrade]

@DepthTrade I have little knowledge about balancing a forex basket. Can you explain how you calculate that?

Hello HobbyTrading, let me think about that. I don't know if I want to just hand over years of hard work.

 

[HobbyTrading]

Hello HobbyTrading, let me think about that. I don't know if I want to just hand over years of hard work.

Oh I see. I wasn't aware that I was asking for "secret sauce". I would be interested in the basics though.
Let me give an example: suppose I use EURUSD, EURJPY and USDJPY. Would this basket be in balance if I go long 1 lot in each of these?