Keeping it simple
For example, Deutsche Bank put out research in August 2006 that asked investors to consider the possibility that a systematic trading strategy could be run in such a way as to harness the market returns, or beta, that the bank’s researchers say exists in the foreign exchange market.
Beta is often measured by a benchmark index for a given market, so the risk and return produced by the S&P 500, for example, is the beta returns for the US equity market. Transferring the concept of beta on to currency trading, however, presents a number of issues, mainly because the...
