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[boskop]

I really don't understand why things need to get heated here all the time ...

One advantage of synthethics is, that if you have two setups that end up in a synthetic, one setup might turn out as a loser, resulting in a small loss, while the other setup might turn into a winner, resulting in a profit that compensates the loss + make some money since you let it run ...

 

[drownpruf]

Yes.

The two pairs mentioned above were positively correlated at more than 90% on the daily charts during the last 200 days.

Now dare to contradict that too, Mister I-Know-it-All-And-I-Am-Better-Than-You.

Considering they are yen pairs they will be correlated. It's not 90%, let alone exceed.

I find it laughable that you don't know synthetics.

 

[drownpruf]

I really don't understand why things need to get heated here all the time ...

One advantage of synthethics is, that if you have two setups that end up in a synthetic, one setup might turn out as a loser, resulting in a small loss, while the other setup might turn into a winner, resulting in a profit that compensates the loss + make some money since you let it run ...

Right. Like holding synthetics of EURUSD for example. The logic for entry has nothing to do with the (now) entirely new position. All you've done is inefficiently margined the natural and are taking the one leg of the synthetic simply because it's already trending. What if it reverses?

 

[xelite777]

Considering they are yen pairs they will be correlated.

Really?

Here are two Yen pairs: USD/JPY and NZD/JPY.

And yet on the hourly charts they currently have a 0.5% correlation.

Please stop throwing out half-baked "facts" just for the sake of contradiction.

It's not 90%, let alone exceed.

Another "fact" from Mad Magazine, I suppose?

I find it laughable that you don't know synthetics.

Yeah, you wish.

 

[boskop]

Right. Like holding synthetics of EURUSD for example. The logic for entry has nothing to do with the (now) entirely new position. All you've done is inefficiently margined the natural and are taking the one leg of the synthetic simply because it's already trending. What if it reverses?

Yes if that NZD/JPY long reverses then I'll be out, but since it is trending, the odds are in my favour. NZD/JPY needs to break support for me to be out, EUR/JPY needs to break resistance for me to be out - my thinking is, that the odds of both happening are low. Since my strategy here is to follow the trends, I look to eliminate risk as soon as possible and let the winner ride with the trend. Besides, EUR/NZD is putting in a bearish flag, + its fundamentals favour the bearish side as well (at least the way I see them). So actually I can look forward to both legs to turn into winners. I just don't have a setup to trade EUR/NZD right now. Anything could happen there.

No matter what the outcome of these trades will be, I don't see why this approach would not make sense.

 

[drownpruf]

Really?

Here are two Yen pairs: USD/JPY and NZD/JPY.

And yet on the hourly charts they currently have a 0.5% correlation.

Please stop throwing out half-baked "facts" just for the sake of contradiction.



Another "fact" from Mad Magazine, I suppose?



Yeah, you wish.

hahahahaha. Hourly charts. You've gone from 200-day to hourly chart? lol you fool.

 

[xelite777]

Thank you for your input, xelite! I am synthetically short EUR/NZD. That NZD/JPY was one of my favourite setups, especially in such a clear uptrend in that pair, so I just had to take it to be consistent with my strategies, and especially to hedge my other JPY long exposure. I think that was a reasonable thing to do. Now looking back at EUR/JPY I should have taken off some profit around 140 because we are still in a range (D1 timeframe) and wait for a re-test of former breakout levels to fire a short again.. given extreme low FX volatility I feel I acted prematurely. If it wasn't for fundamentals - Mr Draghi giving such a clear hint at the last ECB meeting - I may have been more conservative..

BTW: my USD/JPY is at the make or break level .. if NFP day's close doesn't hold, I'm out there at a 1 % loss.

You are welcome.

It's perfectly alright to open multiple and/or additional currency positions for hedging purposes Boskop, I just wanted to warn you about the (potentially problematic) correlation issue, if you were not already aware of it, that's all.

 

[drownpruf]

You are welcome.

It's perfectly alright to open multiple and/or additional currency positions for hedging purposes Boskop, I just wanted to warn you about the (potentially problematic) correlation issue, if you were not already aware of it, that's all.

Oh yes! Can't calc a synthetic but dem correlations!

 

[xelite777]

hahahahaha. Hourly charts. You've gone from 200-day to hourly chart? lol you fool.

Sure, no one is trading off the hourly charts these days, they just use the daily charts or the tick charts!

And for your information (just in case you feel the urge to post another Mickey Mouse "statistics"), the correlation depends on the time frame : pair A could be highly correlated to pair B on time frame 1 but have zero correlation on time frame 2.

 

[drownpruf]

Sure, no one is trading off the hourly charts these days, they just use the daily charts or the tick charts!

And for your information (just in case you feel the urge to post another Mickey Mouse statistics), the correlation depends on the time frame : pair A could be highly correlated to pair B on time frame 1 but have zero correlation on time frame 2.

You're a joke.

The guy was short EURNZD and you're telling him about correlation between two pairs that net to a natural EURNZD. Guess what, he's 100% correlated to EURNZD!