Dude it makes no difference. Same when you trade a call you can price it through trading in interest bearing securities and the underlying yet you never trade those but the call.
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EUR/CHF Revisited
- Thread starter oldtime
- Start date
Yes it did, otherwise, again I apologize for making fun of your English. It is impeccable. I can't even imagine what it is like to post in a non native language. Just don't use my English as an example. I break rules all the time to make a point or make it interesting.Quote from amazingIndustry:
Hope it helped to clarify.
Same goes for my trading.
My first real money forex trade was short USD/CHF long USD/JPY, (that was back in AUG 2011) and just about everybody on this site tried to tell me I was just long CHF/JPY. Yet my only strategy at the time was to add to the winner. It just so happened that that was on a day when USD/CHF set some kind of one day record. So I have a lot of profits to play with.
well let me put it to you this way. I could do the same thing with two accounts. One trading EUR/USD from the long side and the other trding EUR/USD from the short side. Yes, some of the time I would be flat, but some of the time I would be either net long or net short. Assuming I'm martingaling both accounts, it's possible that at some point I could be net profitable.
Quote from oldtime:
well let me put it to you this way. I could do the same thing with two accounts. One trading EUR/USD from the long side and the other trding EUR/USD from the short side. Yes, some of the time I would be flat, but some of the time I would be either net long or net short. Assuming I'm martingaling both accounts, it's possible that at some point I could be net profitable.
Why is it that only the FX guys on this site believe in this crazy BS? I don't see guys starting threads about being long and short AAPL at the same time. LOL.
that's because they have departments. One department goes long the equity and the other department pisses it away on the hedge. In FX you can stay small and do it all on your own.Quote from Maverick74:
Why is it that only the FX guys on this site believe in this crazy BS? I don't see guys starting threads about being long and short AAPL at the same time. LOL.
I laid it out clear (at least I think so) for him but he seems to have understood nothing judging from his subsequent post. I think its because the entry barriers to fx trading are a lot lower. No paid price feeds required, macro info for the masses available for free, and lots of bucket shops who exactly cater to such individuals. Plus an almost unregulated market adds to it...result....lots of dreamers and those who think there are still low hanging fruits to be picked up.
Quote from Maverick74:
Why is it that only the FX guys on this site believe in this crazy BS? I don't see guys starting threads about being long and short AAPL at the same time. LOL.
Oldtime, may I give you a kind advice, and I am serious that it is meant in good spirit:
You sound much more stupid than I assume you are with such comments. You claimed you understood triangular arbitrage but its very clear from your above posts you simply did not. I recommend you get a piece of paper, write down an arbitrary position in EURCHF and try to exactly replicate through positions in EURUSD and USDCHF. Then you make adjustments to the EURUSD rates and USDCHF rates and back out the new quote of EURCHF that must more or less hold otherwise it would be immediately arbitraged away. Keep track of your virtual positions in both pairs and employ your hypothetical martingale strategy. Then you split subsequent moves that you imply on the 2 cross pairs into two camps: On one side you make the assumption of mean reversion. On the other side you make the assumption of a trending environment. Keep on calculating your pnl. Now you do EXACTLY THE SAME to the EURCHF pair. You increase/reduce your size according to the position adjustments you made in the other two pairs. You will see you end up with EXACTLY THE SAME PNL as the PNL generated on the other 2 pairs.
If you still do not get it or you are simply too lazy to walk through this example but instead chose to insist on your view then you should not be surprised that people do not take you seriously. Why? Because making a mistake is perfectly fine, we all do. Making the same exact mistake repeatedly even though others pointed it out and helped you to understand puts you on the side of a stupid individual. Again I mean this in a good spirit. Several people pointed you to your errors and if you simply refuse to even verify it then the issue lies on your side.
I will not explain more regarding this issue because its actually quite basic and you should by now grasp it or preferably abstain from trading.
You sound much more stupid than I assume you are with such comments. You claimed you understood triangular arbitrage but its very clear from your above posts you simply did not. I recommend you get a piece of paper, write down an arbitrary position in EURCHF and try to exactly replicate through positions in EURUSD and USDCHF. Then you make adjustments to the EURUSD rates and USDCHF rates and back out the new quote of EURCHF that must more or less hold otherwise it would be immediately arbitraged away. Keep track of your virtual positions in both pairs and employ your hypothetical martingale strategy. Then you split subsequent moves that you imply on the 2 cross pairs into two camps: On one side you make the assumption of mean reversion. On the other side you make the assumption of a trending environment. Keep on calculating your pnl. Now you do EXACTLY THE SAME to the EURCHF pair. You increase/reduce your size according to the position adjustments you made in the other two pairs. You will see you end up with EXACTLY THE SAME PNL as the PNL generated on the other 2 pairs.
If you still do not get it or you are simply too lazy to walk through this example but instead chose to insist on your view then you should not be surprised that people do not take you seriously. Why? Because making a mistake is perfectly fine, we all do. Making the same exact mistake repeatedly even though others pointed it out and helped you to understand puts you on the side of a stupid individual. Again I mean this in a good spirit. Several people pointed you to your errors and if you simply refuse to even verify it then the issue lies on your side.
I will not explain more regarding this issue because its actually quite basic and you should by now grasp it or preferably abstain from trading.
Quote from oldtime:
that's because they have departments. One department goes long the equity and the other department pisses it away on the hedge. In FX you can stay small and do it all on your own.