Forex Strategy Video: Why Trade AUDJPY over CADJPY and USDCHF over EURUSD?
• Triangular arbitrage refers to using two currency pairs to price/create a related third pair
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Why is it advantageous to trade two Aussie dollar-based pairs that essentially offset the Aussie's influence? Why would I prefer to trade USDCHF over EURUSD? While we can make 'synthetic' currency pairs out of the product of two other related pairs (such as a long AUDCAD and short AUDJPY position creating a CADJPY), there are advantages and disadvantages in trading the legs or the synthetic. We talk about my reasoning for sticking with the AUDJPY - though I have since taken profit - and looking for a AUDCAD entry as well as my interest in USDCHF over its much more liquid counterpart EURUSD in today's Strategy Video.
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