1) Two currencies
For to currencies YYY and XXX only in the event that you enter 1 lot BUY then input 1lot SELL. It'll be accurate balanced payoff since:
1) net pip value =0
two ) net margin=0
consistently it's a shedding system (reduction of spread) and there's absolutely not any way to profit from hedging. Mo way in any way.
Two ) Three currencies
When there are 3 currencies YYY, XXX and ZZZ
and Dominating currency is DDD
M1:,Margin for pair 1 termed YYYXXX
M2:,Margin for pair 2 termed YYYZZZ
M3:,Margin for pair 3 termed XXXZZZ
P1:,PipValue for pair 1 termed YYYXXX
P2:,PipValue for pair 2 termed YYYZZZ
P3:,PipValue for pair 3 termed XXXZZZ
To acquire accurate balancing: the net should amount to zero.
M1 M2 M3=0
P1 P2 P3=0
we understand FROM GENERAL RULES this:
P1=Lots1*XXXDDD ----- M1=C1*Lots1*YYYDDD
P2=Lots2*ZZZDDD ----- M2=C2*Lots2*YYYDDD
P3=Lots3*ZZZDDD ----- M3=C3*Lots3*XXXDDD
so e have 3 variables: Lots1, Lots2 and Lots3.
C1*Lots1*YYYDDD C2*Lots2*YYYDDD C3*Lots3*XXXDDD =0
Lots1*XXXDDD Lots2*ZZZDDD Lots3*ZZZDDD=0
gt;
gt;should C1=C2=C3 (ALL PAIRS WITH THE Exact Same LEVERAGE) then:
Lots1*YYYDDD Lots2*YYYDDD Lots3*XXXDDD =0
Lots1*XXXDDD Lots2*ZZZDDD Lots3*ZZZDDD=0
gt;
We have three variables but 2 criteria.
So we must assume one variable and solve for additional two.
Hence C is 100,000/Leverage