I have thought about the CHF and taking it out to see what it does with the CSS but havent done it yet. I agree with your assessment but havent gotten into it. I do not trade eur/chf but I do trade the others so in that sense I want to know how they are doing and affecting the market. You have to be careful with this correlation thing because the NZD economy is totally different with how it trades with Euro and CHF. The Swiss banks have locked themselves in for now but if they unlock themselves from the Euro this correlation is no longer true.SpiderX wrote:nanningbob wrote: Eur/Chf follow each other around like Mutt and Jeff and AUD/NZD also follow each other around with the AUD taking the lead, except the last several weeks.
Hi Bob,
Have a question: Since Eur /CHf follow each other so closely, does it make sense to for example actually skip AUD/CHF trade if you already have a EUR/AUD trade ?
Since EUR/CHF follow each other so closely, when you are taking a EUR/AUD buy trade, it is almost as good as taking a AUD/CHF sell trade.
The charts of these 2 are almost the exact reverse of each other.
Does it make sense to have double expose to EUR indirectly ?
It would make sense at least at this point of time to take out "repeated" pairs until this close correlation between EUR/CHF ceases.
i.e No point monitoring AUDCHF, CHFJPY , NZDCHF, USDCHF if we are already looking at EURAUD, EURJPY, EURNZD, EURUSD
Please correct me if this is wrong.
Cheers
For example it used to be the eur/gbp mirrored each other closely and it was the least volatile pair on the market seldom moving more than 60 or 70 pips a day. That is no longer true. The eur/gbp have decoupled the last couple of years as the British economy has diverged some from the Euro economy. I used to trade the aud/nzd because it was an easy range pair but now I seldom do. China affects their economies too much now so that correlation is much smaller in price action. The Swiss bank has tied their anchor to the Euro for now but in the future if that changes then they will diverge again. So in one sense I understand what you are saying but long term it may not stay that way.
Long term fundamentals dont look good for the Euro. France' banks are deeply in debt holding a lot of loans to other countries and may become news in 2014 or 2015. When that happens the Swiss may no longer want to hook themselves so closely with the Euro.
