EUR vs GBP: Pair trade setup

29 ก.ค. 2015

Simple trade, trends are pretty clear here I believe.
EURGBP is a strong downtrend and will resume its direction this week I believe.
GBPUSD is an interesting long setup, with 11 weeks at one price and sitting above the mode currently.

You can market buy now, but it'll be 100% confirmed once it reaches my entry level on chart (1.57084).
Targets are for both time and price, you can trade all 3 as single pair trades, or use ADR to measure position size on each side and only trade eurusd and gbpusd on opposite directions.

ADR values are:

• GBPUSD: 105.6 pips/day
  
• EURUSD: 98.6 pips/day
  

So if risking 2% with a 10k capital, you will use 0.19 standard lots for GBPUSD and adjust the EURUSD position size by volatility to match the GBPUSD one as follows:
105.6/98.6 = 1,070993914807302 (ratio to adjust EURUSD position size with)
Thus, EURUSD lot size should be: 0.22 std. lots

If trading single pairs, it's simple, cost per pip as everyone knows.

Good luck,

Ivan.