Bitcoin vs Etherium

This is an early experimental correlation analysis indicator for use on the BTC/ETH markets, the indicator has already been tested for a long time on other markets such as AUDUSD/NZDUSD and Crude/Gas markets, though each case is slightly different requiring different version of the indicator.

Forward trade means: We buy BTC and sell ETH

Reverse trade means: We sell BTC and buy ETH

We are not sure about trade size,  in some brokers the simulation makes sense when the BTC trade size is smaller than that of ETH,  by (BTC/ETH) times,  but we actually trade Bitcoin cash instead, on a 1:1 ratio. 

But regardless of exact ratio, the original concept is that we tarde correlated markets,  so as goes market A so goes market B. 

In the case of currencies it's always 1 to 1 ratio, whereas in the case of energy commodities it depends on actual broker

and can be different.  In the case of BTC and ETH it has to be different too, to make the 2 trades more comparable in size.

The basic idea is to filter out single market volatility and see the relationship between the two markets in a more solid way.

All strategies involving paired trades are generally better than single trade ones, because you don't have to be specific about either market.

#bitcoin vs etherium, #crypto markets, #correlation trend