Correlation trading on Currency Pairs

Discussion in 'Trading' started by BFP, Jul 18, 2007.

  1. BFP



    I have a currency portfolio that im looking to increase returns on by looking at currency pairs trading..

    does anyone know the best way to go about this? Im presuming that you need to know the correlation of these pairs??


  2. It's not like trading stock pairs. All currency trades involve a pair. For example, if you buy Euros with $, you're going long the Euro and short the $.

    If by currency pairs you mean buy Euros with $ and sell Swiss Francs for $, it's still not a pairs trade since there's a cross trade between Euros and Swiss Francs. So you can just cut down on the commissions by buying/selling the cross trade using futures. An in the end, it's just a currency trade.