If you could only trade 5 currency pairs, what would they be?

I know the easy answer is “All four of the majors, plus maybe a nice commodity”. But I am curious, based on volatility, average spread size and correlation - which five pairs would you feel give you enough of a look at the forex market to be successful?

I’d fairly settled on at least: EUR/USD, GBP/USD, USD/JPY, and (perhaps) EUR/JPY.

I know GBP/JPY has monster volatility going for it, but so does GU and GU has a lower spread. AUD/USD might be a good pick to have a pacific currency in there but does it correlate too strongly with EU and GU? USD/CHF is a Major, I know, but it has been behaving weirdly as the Swiss keep monkeying with it to keep its value down. USD/CAD might be good, to get a piece of Oil. Certainly there are others.

So, if you could only trade five pairs, which would it be?

Right now I focus on USDCAD, AUDUSD, GBPUSD, EURUSD, & EURJPY :slight_smile:

I was stumbling around on the Reuters web site quite some time ago, saw a forex article, and followed some other writings and links. Somewhere in there I saw the following: Pairs by Vol. Share -
EUR/USD = 27%
USD/JPY = 13%
GBP/USD = 12% TOT. = 52%

AUD/USD = 6%; USD/CHF = 5%; USD/CAD = 4% TOT. = 15% Grand Total = 67%

This was for all sessions so how the N.Y. session for instance might be different I don’t know but it seems to me that I can’t go wrong following the numbers. I also don’t know if the recession has changed the % any. EUR/JPY, EUR/GBP, & EUR/CHF are each 2% and anything else is 1% or less. Not exactly what you asked but as I trade only the N.Y. opening hours I go with the percentages. d.

UCHF because of it’s negative correlation with EU (my only traded pair) and UCAD because of oil’s strong predictive correlation with it.

I don’t have any experience with the others, unfortunately.

So you trade UCHF and EUSD? Since you’re basicly just buying on one and selling on the other why not just watch them both, and pick the better trade setup? This would help you reduce risk.

Oh, and I only trade GU GJ and EU, thats it, not every strat works with every pair

The spread is kind of prohibitive in my case. On Oanda, it’s approx. 1.9 on UCHF vs. 0.9 on EU.

depends on your trading strategy and style, and when you can trade.
how many pips do you look for in a day, a week or month?
I just concentrate on GBP/JPY and i only have those charts displayed, no others, and thats all the information i need and can handle, any more than one for me it starts to become muddled.

There are times I look at people just trading GBP/USD or GBP/JPY and marvel they get enough opportunities to trade - I guess if you take signals off multiple timeframes.

But I envy the simplicity of just watching one or two pairs. That’s why I’m looking to do this; I’m convinced charting this many pairs has just become too confusing for me.

just the 4 majors.

actually, sometimes i play with gbp/jpy.

Maybe they’re more selective about the types of trades & risk they’re prepared to accept?

Perhaps if you specialize with one or two entry signal triggers & match them to the conditions in the market that offer you higher potential odds of success, you might improve your returns when committing money to the market? that is of course if your current method of doing business isn’t achieving the desired results, which I imagine is the case if you’re looking to change things around.

Rather than continually hunting for signals across multi timeframes, you could instead use the multi timeframes on the one or two restricted pairs to assist in filtering the opportunities, ensuring you trade when the odds are more favorably matched to the strategy you’re working with.