The first step in creating a long-short portfolio is ranking all instruments based on their strength and weakness. Note down the RSL value of each currency pair at the start of the week or month. The pair that has the highest RSL value is the strongest one. The pair that has the lowest RSL value is the weakest one. Now open Buy positions on the top two stronger pairs and open sell positions on top two weaker pairs. Keep the positions open for the next week or month start. At the start of next week or month, again rank the instruments based on their RSL values and adjust the positions. This portfolio is hedged, market neutral and offer steady return over long periods of time.
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