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.
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.
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 will also say pair correlation is subjective to a time frame and even then it ebbs and flows out of those correlations.
I originally replied to this thread in good faith. Certainly the OP can handle what he decided to dish out.
Hello everyone, have rebalanced and added some more weight to the over all position value. Up to 77k now.
@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.
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?