Quote:
Originally Posted by PIP CHASER
Thanks for your post. I would not personally trade the yen cross pairs for this strategy. As for as earning interest over the long term, I think this is an great way to earn passive income if the risk can be managed.
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Long EUR/USD + Long USD/CHF = Long EUR/CHF
all the risk information you need is in EUR/CHF. As you can see, there is still some serious drawdown risks (Look at Oct 2007 to Mar 2008). I'm sure you would agree there's nothing special about holding a long EUR/CHF position. I think you are counting on your negative correlation being perfect, but if it was perfect, EUR/CHF would flatline, and it clearly does not, meaning the correlation is far from perfect.