# SATORI FX: Forex Mathematical Analysis Tools for Excel. The CARTESIAN PLANE.

good time and good space fellow traders and welcome back for the third part of this overview of the satori effects for excel and in this chapter i'm about to talk about the cartesian plane concept okay so let's dive into it immediately and what we are talking about it's a bit more complex so bear with me till the very end and if there's something you think is not clear please go back and re-watch again because i will cover all the necessary things to build by yourself by having a set of data that you grab from somewhere i grabbed them from metatrader4 so the necessary tools for creating in this case the cartesian plane so a bit of concept before it's very important but let me just put in evidence what we are talking about what we are talking about is this weird thing here okay what is this this is basically a representation different from the other kind of representations while the ufo market performance or other representations are based on the time on the x-axis and the price or variations of price in the y-axis in this case we have both in the x-axis and y-axis we have prices and this can change completely the way you look at the market but it's another kind of reliable information thanks to cartesio that we can apply in order to have information of the overall behavior of the market through the day or as i showed you but let me just do back again uh on multiple days because if i switch for example and want to have the situation of the market at five days let's wait a second for the spreadsheets bank we have a completely different information right and we can observe here the different currencies in real we have six currencies repres clouds of points the canadian dollar the swiss franc the gbp the australian dollar the new zealand dollar and the japanese yang always at five minutes and always with a referral point that it's always stated on the zero gmt universal time okay great so let's do a bit of uh introduction to the way we want to calculate this thing and the moment we understand how to calculate this thing this will be much more easy and this will be easier as well of course here i repeat again is not an excel course so if you don't have the skills for excel i suggest you to go on udemy and do some course in order to some classes in order to get some skills in excel because this is the basic uh requirement in order to work with a tool like excel okay so i am supposing you know what i'm talking about but i'm releasing the formulas or the way to achieve this kind of result okay so as i told you in the my previews detail we were talking about let's get rid of this and let's put let's put this one here okay here i will need also some drawing tools let's grab a pencil let's see how the pencil works do you see that yes okay let me grab this yeah okay so the concept is that we are using the x-axis let me just do a brief yeah more yeah okay we have the x-axis and the y-axis right here let me just do that way that's better and let me also let me also erase what we don't need okay sorry for this okay so this is the x-axis the y-axis and the x-axis the concept is that we want to use for as regard the data that we need for the x-axis we want to use this data here so the euro the pardon okay i will go and first i draw and then i'll tell you this values will be the x-axis and these values would be the y-axis okay what values always the percentage of variation of them i remind you in order to get the percentage of variation you need to do something like t minus t minus one divided by t minus one of course then you can do per 100 okay this is the percentage of variation okay so we need this data first and we need to organize this data because in this case i told you we have the euro which is always base and this is pretty fine pretty fine and nice because data are already settled for that we have another case on the x-axis so in the x-axis we put us dollar values which are these ones and in the y-axis we put the euro values okay so euro values are already ready to be used the x-axis we have usd cad which is fine usd is base usd is based also usd yang is base but we need to solve this little issue which is not an issue it's just the convention that your broker provides you gbp usd and not usd gpp right in which usd is quote in order to obtain uh on this particular stuff here in order to obtain usd gbp usd roc and usd ncd they will be equal in as intuitively we can argue as minus the gbp usd quotes we have the o z usd and the nzd usd okay so first we need to convert in order to have usd as base even for as regard the x-axis and then the work is done it's very simple okay so let's dive into it and let's grab the main cartesian plane so what do we have here here i have reported the euro dollar the euro chf all the data until the new zealand dollar yen but in real i'm using only the information that it's here first of all what are these data okay if i want to know what this data is basically i need to go back and grab the data that are let me just grab it yeah here that are calculated here okay so these data that are calculated here in order to obtain then the clustering and then the ufo market performance are the same data that we want to have them in our main cartesian plane see we have the euro dollar 0.096 0.0951 0.096 0.0951 these are the data that we need for and if you want to know how to calculate this watch the previous video and you will have them okay oh one thing prior to continue that i didn't mention my fault but i will repair immediately here in the basic concepts you can say yes marco but we have only six currencies here while in the market performance we have eight currencies of course we are missing one of the most important crosses that gives us the other two currencies that we need the euro dollar okay euro dollar where the euro dollar where the euro and the dollar are in this kind of representation euro dollar is in the z-axis of course i told you we have an x-axis a y-axis but these axes are related all on us dollar base values and euro base values as we know from a simple formula that let's say eurocad and usd cad by subtracting eurocad to usd cad we obtain euro dollar but also by doing this with euro yen and usdn we get euro dollar right when we deal with gbp aussie or usd against dollar we need to add not subtract but the moment we have making we are making this conversion we are also having that euro gbp minus usd gbp equals to euro dollar we always get back euro dollar okay and this euro dollar is this third axis which we represent ideally at 45 degrees on this cartesian representation in real we have the x and y and the z okay so it's like vertical it's like above or below negative or positive but in a two-dimensional representation we get and this is something related to the cartesian math so even in this case you need to have basics of cartesian math but it's something very achievable you go to wikipedia you go to any kind of math territory or information and you grab this basic concept okay so we also have the information about euro and about dollar by this representation is just that we don't see them but we see them as a relation and constant relation between all the let me just do for example here we have the the i hope to make straight lines okay we have the australian dollar here we have the these two values because this is a point in the space and we have the usd oz coordinate which is the variation of price that i was talking about and we have here the euro aussie coordinate okay so this is related to the y-axis and this is related to the x-axis here and here and by doing this on each and every point for each and every currency we have the range of oscillation on a specific spot in the space where oz exists all z in terms of euro and in terms of dollar so we know that australian dollar configured by these two elements of information can exist only in the range of euro dollar because of this relation where euro in order to obtain euro dollar we have euro oz minus usd aussie and then we get euro dollar okay so in order to create this plane uh cartesian plane we take out of the equation euro dollar because is already inside the information that we want to observe and it will come out then and will be used for the analysis okay wow it's taking a bit longer with the with the explanation but it's important for you to understand and you have it there for your availability okay so let's go back here remember we were saying that we need to create this cartesian plane so we need the percentage of variation that we obtained here and this is in the pink color so you can easily is the only set of values that we are we have obtained and that we use for multiple purposes that was in the previous video very well explained okay so of all this information we only need we only need let me just do this this information this data and for the calculation we have to place the data this way usd cad and eurocad first we post we put the x-axis because this is the way excel works and then we put the y-axis so we have usd cad and eurocad usd chf and euro chf usd gbp usd oz and usd new zealand are something that must be calculated by making the the minus of the variation okay because there are these are the only three crosses that the base which would like to be the usd in real stays in the quote as we are receiving them from the broker so we need to convert them for the rest is fine and if you want to create then a chart like this let's do step by step okay and of course i want to grab here a lot of data let's say i hope to get into the ac yeah that's fine anyway uh i will need that to go to the insert uh you don't see that but trust me is that is there insert and then go to the recommended chart and in the recommended chart we select the scatter okay and in the scatter we select this one of course colors are different then you have to adjust the colors and all the stuff blah blah blah but the result is basically the same okay let me compare to you so this is a simple way to obtain the same price distribution of course then i changed the colors i arranged where the price is and i do i did some extra calculations but basically if we want to check the australian dollar here value australian dollar okay and the distribution over euro dollar so the z-axis and i also want to grab the australian dollar here the spike is a different color is the same right so this is the way we calculate our cartesian plane then there's another story on how to use it but this would be the topic of further videos at this moment i'm just showing you how to build these tools which is very important because the moment you understand how a tool is built and the mathematical formulas or the constructions that are underlying this tool then you know what the tool is saying to you regarding to what crosses or currencies and then you can have a right and proper interpretation of that of course you can do also other formulas that you see here but this is not the case of our of our video which is already taking too long and i need to go further okay then remember so this is all about in order to calculate this representation but we also have here a correlation map process and the correlation map with crosses x and y this one is an oversimplification of this one that is based on euro dollar with the x-axis and another cross on the y-axis in fact if i place euro dollar on the x-axis and let's say cut the n canadian dollar yen in the y-axis i have this price distribution if i go and check and select the canadian dollar yen here i'm sorry you're not seeing that well but i will let me do this okay and let me do this in order to give it more canadian dollar let's give it a marker you agree that it's the exact same price distribution right okay so i'm not going to explain this because this is an over sophistication that is done by some skills that you may have in excel and this is not my my my intention this is has to be your intention what i'm anyway about to explain to you is also how to achieve which is the most important one this secondary cartesian representation which we call it correlation map which correlates the oscillation of euro dollar that in this plane is the z-axis in this representation becomes the x-axis and in this case i would have instead of representing the canadian dollar yen i could have used the australian dollar tree jpy why because we have the extremes of this of this clustering of of points we have the australian dollar and the japanese yen okay so australian dollar japanese yen and sorry not australian dollar japanese yes australian dollar japanese yang and australian dollar japanese yen let's also here create a australian dollar japanese yen yeah see that is we have the same distribution exactly the same so when we have this it's enough this is a something extra that it's very important because i would like to analyze a specific combination of two crosses and i can do it here but this is the source that i also get this information with the same meaning okay and in order to do this we basically go for this so we create another kind of graphical representation let me do it in a very simple way the rest of the currencies that are not uh represented here and not used for this um cartesian representations are all the crosses let's let's put them with a different color okay so canadian dollar chf gbp canadian dollar all the canadian and so on until the ncd jpy and of course they have to be put in relation with the representation of euro and dollar price variation of price information so what can we do we have the euro dollar which is the beginning of everything okay and we simple trace until we want whatever data of course we have zeros because we are analyzing just one day with zero at zero gmt and then we go to the insert button and then we create another kind of chart that it's always scattered and in this case it's not this one but it's this one okay and by creating this we have a graphical representation that then we can adjust colors whatever of these values and then by keeping the x-axis still we move and we select the points of the remaining crosses and we obtain this chart representation that is this one apply copy okay of course different colors the point of the now that is changing but this is a sophistication you work on the chart and you adapt it the way you prefer but if we grab let's say an example canadian dollar canadian dollar not canadian dollar but aussie yen we were saying here and ocn we're saying here just to show you that is exactly the same process see the price distribution is the same so by showing you this i have basically shown you the cartesian plane representation formulas to calculate this and the concept that stays behind this is an extra but you can use this one if you want to do this you don't need me and my explanation but you need skills in excel okay okay this will end the this part of the video and in the next one even if we take a little bit longer but it was necessary in the next one we go through the oscillator the currency's momentum oscillator okay so let's stay tuned and thanks for watching

*2022-02-03 02:03*