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Made own chart in MetaTrader 4 (on Adroid) to compare N pairs, CFDs, etc. and showing a sum of them example
x * (long) CFD 1 - y * (short) CFD 2 = line 3
Is it good idea to invest in correlation between different markets and if, how would you setup conditions - entry frequency or limits on value kept, entry & exit criteria, ev. TP/SL (hard to set for 2 different instruments).
In theory DCA could help, but when you I have also average line and can see how they perform comparing to average of the sum, maybe would not be better to account relation of watched line to its average too ? Here chart mentioned: long CFD(blue) - short CFD(orange), white is sum of that, black its average, ratio should not be exact, also real spreads change the chart a bit, taken for 1Q: Long Short 2 CFDs

And here for ilustration S&P500 15x Long + WTI 1000x Short (multiples of current value) chart: SP-WTI

As you can see aprox. from 2015 there is negative correlation

closed as unclear what you're asking by Peter K., Bob Baerker, D Stanley, Dheer, JoeTaxpayer Jun 14 at 15:15

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  • "Is it good idea to invest in arbitrage between different markets"? Not if you're inexperienced, and using consumer-level information. – RonJohn Jun 12 at 14:41
  • Correlation isn't arbitrage. – Bob Baerker Jun 12 at 18:44
  • My mistake - changed the word, but not so big difference - there is a lot of algos, HFTs, etc. so there is high correlation between indices, oil, Ninja, etc. – Tom Jun 12 at 19:21

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