A.I.M. Users Bulletin Board

[Conrad]

Clive,

In regards to my message

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55793998

I am still chewing on the proposal to trade a currency pair X and 1/X simultaneously.

The interesting feature is that if X moves in a particular way we know exactly the value of 1/X. . .even when we correct for trading costs. . . (even if in practice the two currency pairs might not be exactly each other's inverse the inverse assumtion would simply provide a trading guidline for the real thing).

This leads me to think that as long and X behaves within resonable limits we can in principle determine an optimum trading method for switching between the two equities. It is in principle no different than having two currency deposits and switching back and forth on their relative weakness and strength.

Apart from my specific Vortex parameter structure for setting the buy/sell agression factors I am questioning if there is some fundamental reason that would prevent one from determining an optimum trading strategy for X and 1/X in advance. . .apart from possibly one's ignorance of mathematical methods required to do so?

I wonder if your deep insight in such matters can come up with the "saving grace" for my scheme!