Forex "Pair Trading" or "Hedging"

[DeeDeeTwo]

Short term USD/CAD and AUD/USD have vary high negative correlation...
So scalping both concurrently gives you more options.

 

[TantalusFX]

Quote from increasenow:

Example: go short EUR/USD and long GBP/USD and capture the divergences and net some pip profit...anyone do this or with other crosses?

This would be the same thing as shorting the EUR/GBP.

 

[stevegee58]

Since the NFA rule change disallowing hedging (i.e. you can't be long and short EURUSD at the same time) for US customers, there have been all sorts of creative work-arounds.

One is the use of correlated pairs to offset the risk of a position. For instance, say you're bullish EURUSD so you go long. At some point you decide the trade is no longer working out. You can either exit or you can go long USDCHF. The problem of course is that while these 2 pairs are strongly negatively correlated, it's not perfect. As EUR and CHF trend in relation to one another, the EU and UC pairs are moving in and out of correlation.

I'm not endorsing this, just saying that someone said they were doing it.

 

[increasenow]

hey cats...you have just got to read this...wow...great insight and stats...

http://www.fx360.com/commentary/kathy/2371/the-strongest-forex-correlations.aspx

 

[Ivanovich]

Quote from TantalusFX:

This would be the same thing as shorting the EUR/GBP.

+1

Increasenow, what is your objective here?

 

[increasenow]

Quote from Ivanovich:

+1

Increasenow, what is your objective here?

simply helping traders see the various correlations between various cross rates...very interesting and important to note, I believe...correct?

 

[ddaytrader]

Quote from increasenow:

simply helping traders see the various correlations between various cross rates...very interesting and important to note, I believe...correct?

Inky, are you ignoring me? I'm beginning to think you are ignoring me. Perhaps you even put me on "ignore."

I asked you a question in you other thread, and by other I mean the one the mods have not yet closed down.

Come on, buddy. I'm getting ready to increase (my leverage) now!

 

[milktruck]

Quote from Ivanovich:

+1

Increasenow, what is your objective here?

To be the greatest troll of all time and unseat stocktrad3r from his throne.

Maybe they are all Port?

 

[bpcnabe]

Quote from ddaytrader:

Inky, are you ignoring me? I'm beginning to think you are ignoring me. Perhaps you even put me on "ignore."

I asked you a question in you other thread, and by other I mean the one the mods have not yet closed down.

Come on, buddy. I'm getting ready to increase (my leverage) now!

 

[increasenow]

read this...this is what I am trying to describe...

http://www.forexhound.com/article.cfm?articleID=70661