** A recent AUDJPY short and interest in a AUDCAD long equates to a short CADJPY, but I wouldn't trade it
** Triangular arbitrage refers to using two currency pairs to price/create a related third pair
** There is an advantage to trading the two 'legs' as with the Aussie, or a single as with USDCHF
Why is it advantageous to trade two Aussie dollar-based pairs that essentially offset the Aussie's influence? Why would I prefer to trade USDCHF over EURUSD? While we can make 'synthetic' currency pairs out of the product of two other related pairs (such as a long AUDCAD and short AUDJPY position creating a CADJPY), there are advantages and disadvantages in trading the legs or the synthetic. We talk about my reasoning for sticking with the AUDJPY - though I have since taken profit - and looking for a AUDCAD entry as well as my interest in USDCHF over its much more liquid counterpart EURUSD in today's Strategy Video.