unique4x
Long

Correlation Trade Between EUR/USD & GBP/USD

FX:EURUSD   Euro / U.S. Dollar
*Position Update: As of 05/15/2015 @ 7:41 EST we liquidated both sides of this correlation trade with a profit of 28.6 Pips.

The Trade: Long EUR/USD             & Short GBP/USD            

The correlation between these two pairs is 96% over the past year. The widest the spread has got over that time is about 700 Pips. Over the past 18 months we saw the spread widen to approximately 800 Pips. Currently these two pairs are 700 Pips apart.

With that said we will be entering 1/2 our intended position size with the intentions of easing into the second half if the spread widens significantly. We expect to see this spread narrow over the coming days/weeks. If it happens before we can put our entire position on we will feel comfortable closing out the position with a profit of any amount.
im new on this can you explain it for dummies

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