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Hans,
> So what can be used as benchmark ? On stocks I hear sometimes FORD
> is outperforming automobiles, or XYZ outperforming chemicals - how
> do they calculate that - is it just ROC ? what period ? what else ?
this problem has been bugging me as well for some time. One
possibility would be to create an artificial average of currencies -
perhaps weighted towards GDPs or ....
One related matter is the so called Big Mac index. McDonalds
sources most of its products locally. That is why some people thought
that a Big Mac (being in every country all over the world the same
thing) could be an universal measure for purchasing power.
Basically one would just take the price of a BM multiply it with the
dollar exchange rate and you get a measure whether Bangladeshi BM's
are undervalued versus Russian BM.
However all charts I have seen always show the price of the
international Big Macs compared to the American Big Mac..
But what happens if the American BM would be overvalued - then
all other BMs would be undervalued (vs. the dollar). Is this really
the best way to do it ?
Wouldn't it be much better to calculate the value of the average Big
Mac in all countries and then compare all countries with this average
- or how do we weight the BMs ?
Just some food for thoughts.
Gerrit
> ok, as per various requests lets talk FOREX:
>
> I would like to hear suggestions how to correctly and EASY analyze
> several currencies against each other, i.e. which is strong
> (outperforming others), which is weak (underperforming others) -
> maybe by using the chart scanner (or whatever).
>
> In FOREX you always trade a currency pair, e.g. not IMM-DM, but
> USD/DEM and not IMM-JY, but USD/JPY - this is nothing different than
> the reciprocal of the IMM currency with same risk/reward, but offers
> in FOREX the flexibility to trade OTHER pairs, while you in IMM
> actually trade DM(/USD), as well as GOLD(/USD) and S&P(/USD) - so
> could trade GBP/DEM or DEM/JPY just to name 2 major "crosses" (as
> they are called in difference to so called "MAJORS")
>
> SO if the analyses tell that DEM is a weak currency one could short
> the DEM, but needs BEST to short it against the STRONGEST currency
> not against a similar weak currency.
>
> The basis: I have daily currency fixings from the German BUNDESBANK
> for the last 10 years - thats ONE price per day, for 17 currencies
> (those getting FIXed daily) plus AUD (aussie) NZD (kiwi) - and
> through creating COMPOSITES in TS you can create whatever pair out
> of the bunch, e.g. with USDDEM and GBPDEM you can get GBPUSD etc.
> overall more than 200 pairs (more are possible, but dont make sense)
>
> Unfortunately due to the EURO-mumble lots of them have lost their
> attractiveness, but some will be still there afterwards (whenever
> that will be), e.g. GBP, JPY, AUD, NZD, CHF etc.
>
> So what can be used as benchmark ? On stocks I hear sometimes FORD
> is outperforming automobiles, or XYZ outperforming chemicals - how
> do they calculate that - is it just ROC ? what period ? what else ?
>
> rgds hans
> retired FOREX broker dreaming of good old days
>
> PS: If someone wants the data:
> Its in MS format, TS can read it - just send me a mail PRIVATELY !
>
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