Let’s refresh on how to calculate crosses. We have discussed it in early chapters already, but you may have forgotten that, so now you will have a chance to remember. Also it will be useful if you want to understand how it works in detail. Cross Rate Calculation Let’s suppose that we want to calculate AUD/CHF rate. What pairs we have to apply to do that? Pipruit: And what we can do to reduce the probability of such losses? Commander in Pips: The most common approach to this is to use not just one but two MAs on the chart. Pipruit: Anyway, I suppose that have the same common currency. Simplest answer is USD, and it may be better to use particularly US dollar due to the better liquidity of major pairs. But, I suspect that AUD/GBP and GBP/CHF also could be used for the purpose, since in this case both pairs again have a common denominator that could be used to “link” this pairs in cross rate. Commander in Pips: Very good. You’re right that using of USD is preferable, since we will use major pairs, such AUD/USD and USD/CHF. The bid/ask spread is tighter with major pairs; hence you will get sharper number for AUD/CHF using them. Applying for that purpose other crosses, you will include larger bid/ask spread twice, since you will calculate cross pair via other cross pairs. So we will use the first way. Let’s assume that AUD/USD bid/ask price is 1.0679/1.0680, and USD/CHF is 0.8091/0.8092. So, to get bid for AUD/CHF you just need to multiply the bid AUD/USD by the bid USD/CHF: 1.0679*0.8091 = 0.8640 To get ask price for AUD/CHF you just need to multiply the ask AUD/USD by the ask USD/CHF: 1.0680*0.8092 = 0.8642 So, our quote for AUD/CHF is 0.8640/0.8642 Pipruit: Bingo!