Trading Forex in Baskets to diversify trading risk for both, speculative trading or hedging Forex risk by 
I like to come back on earlier 3-Way Arbitrage possibilties to trade the present volatile markets with less risk compared to trade just a signal currency pair.
Earlier post about this subject are on: http://blogs.fxstreet.com/forexhedge/2009/02/05/arbitrage-2/
On Febr. 20th. the Balance indicator, at the bottom of the chart below, closed below the zero line indicating to sell EUR/CHF 1.4763 and buy both. EUR/USD at 1.2535 and USD/CHF at 1.1781 to bring back the three in a balanced position again.
Near last Fridays’s close the open position was still at EUR/USD 1.2830, USD/CHF 1.1555 and EUR/CHF at 1.4835 which is + 297 pips an EUR/USD, minus Swiss 226 pips on USD/CHF and minus 72 Swiss pips on EUR/CHF, or all together in USD near US Dollar pips 600 per 1 lot each on the above currency pairs.
Not much maybe, but still money and reduced risk.
What can we learn from this strategy ? Using three currencies, which are normally in balance with each other, will reduce risk, have higher cost and use more margin.
Due to a holiday break I can only answer questions after March 28th.
hello Ron
do you trade these 3 currency with equal lot ?
and if you don’t mind when do you enter a trade in your 3-Way Arbitrage?
thanks in advance
Hi, thanks for your comment.
Yes, 3 x equal amounts to keep it simple.
I look to daily bars created in NeoTicker and a daily close at the same time as Wall Street.
It’s not possible to trade this intraday because it’s to volatile.
Best regards,
Ron