Hello,
Can someone please tell me whether there is any risk/problems with entering say 4 trades all with GBP as the base currency.
Thanks in advance,
You mean hedging? If hedging then you should look into the correlation of the pairs. For instance, if you are risking 2% per trade and the pairs are positively correlated, then you are basically risking 8% for those 4 trades.
This is interesting… the book says its a taboo. Yes the last post is correct in as much as your going all in on reasonably corrolated pairs. I on the other hand I’m bias Euro… so track all the Euro crosses (except exotics). So I would argue that if one is tracking say six Euro crosses, one has a better than average idea of where Euro is going and can see a break in any given direction on some earlier than others. In addition, which of say six are strong or weak. Tonight for instance unsurprisingly given its Asian… Euro broke predominantly long on E/J… but followed thereafter to a greater or lessor degree by other Euro crosses.
So yes at fist blush, not a good idea. But theres always room for an alternative perpective. :53: