Trading more then One Pair?

Hello everyone,
I know it is usually recommend for novice traders to start out trading more then one pair. However, I think I have come along way and looking to trade another pair. Specifically cable. I am not increasing the number of pairs I trade to increase my profits, mainly doing it because I want to increase my difersity. Like today during New York session I didn’t really get a strong signal to enter. However, if I was watching cable I would of had a strong signal.

So do you think it would be safe for me to follow another pair? I just want to follow this pair to supplement my trading opportunities. I plan on not having two positions open at the same time. I just want it there in case there isn’t opportunity in one pair over the other? Do you think this is wise and manageable? Do you think my motives for following another pair are valid?

Thanks,
–Nate

I’m only a newbie myself but I don’t see this as a problem.

If you are confident in you ability to handle two pairs, are strict with your management of trades and can track and be aware of any important news releases relating to the two pairs then fair enough.

I certainly wouldn’t be trying to handle any more than 2 for a while though! :slight_smile:

Cheers,
PKFFW

If you’ve only got a position on in one pair at a time, then there’s no reason why you can’t follow multiple pairs. This is especially true of you are using technical analysis and are comfortable with your approach.

I think trading multiple pairs is great to diversify, but when doing so you have to pay close attention to the correlation between pairs.

If you are trading 2 pairs that correlate fairly well you could still take a trade in both pairs but trade half size in each one.

If you trade 2 pairs that don’t correlate then a full position in each one is fine.

If you are confident in you ability to handle two pairs, are strict with your management of trades and can track and be aware of any important news releases relating to the two pairs then fair enough.

That answers it.
Ask yourself: Can you really study those pairs at once and make sure you fully understand the fundamental path for them? If you answered yes, then no problem, do it.

Cable is really volatile, but some people donot like volatile pairs. If you really like Cable nature, why would not you put all your trade efforts into Cable and trade it? – Just a note…

Of course, if you don’t care about fundamentals and are strictly a technical trader, you can monitor more pairs. That said, if you trade short-term you definitely need to know what data releases and the like are on the calendar.

I am defiantly Technical bias. That being said, I try to stay away from news announcements and be out of any trades when major news is coming. If it is lite news I may wait to see what happens if anything, but definitely would move stop loss + some pips and hope for no slippage. But anything considered major I am out of there! Most of my trades only last a few hours.

Whoa! You should [B][I]never[/I][/B] move your stop. If you are worried about something happening, get out of the trade. Widening your stop increases your risk, potentially beyond what you set as your limit for the trade. Don’t do that. It’s a bad habit to get into.

Oh no, I don’t do that. I move my stop to +5 pips from my entry! That way if it does go against me I am out with some profit. Instead of doing break even stop I do +5 because I may be concerned with slippage.

^^;
Thanks for the advice…

I don’t like that a whole heck of a lot either. You really shouldn’t be adjusting your stop based on the data release. If it is something that concerns you, then really you should be out. Otherwise you run the risk of making your stop too tight and very much increasing the odds of it getting hit by what could be nothing more than a little noise. That could take you out of a perfectly good trade.

I see you point. Typically though it is nice not see a winner become into a loser. When it isn’t news time I can usually adjust stop to where if it where to be hit then it would be a reversal signal. However, you have pointed out I probably should come up with a better strategy for news times.

As a beginner I like to know what are the 2 o 3 pairs more important to trade with?
Thanks

You could try the pairs you have more information at hand, so you can understand quickly the movements in the market.
Also, you can take smarter decisions, because It�s not the same EUR/USD and GBP/JPY when you are in America (except if you are a Chinese in this country hahaha)
Get good info�s currency you want to trade

I agree with kataley. In metatrader I can see 4 windows but I�m trading just with EUR/USD, I�m trying to learn about the others but I need time before trade with them.

The most common traded pair is EUR/USD, the other one I use to trade, because of my knowledge about the pair is GBP/USD, the rest of the pairs traded are less popular but it doesn�t mean that can�t make you win pips�. You just have to be sure about the information you hold on any parity traded

I’ve been in Forex now for a little over two months, coming from an futures background. With that said I started out scalping in demo with no rhyme or reason (didn’t understand the market) and lost a few bucks, went back to a demo account, found a good method from this site and at any time trade 4 different pairs.

I’ve found (so far) that you can note the times a pair will move to make between 10-50 pips, I trade with FXCM, so maybe their setup makes it easier.
I know that my current demo success is because I use their web info and guidance while continuing to develop my skills. Although Forex can be a scary thing :smiley:

I prefer to have a very broad view of the market. In reality, FX is about the individual currencies. It is the individual currencies that move a pair, and the sum price action you see is not a separate entity. If you have the opportunity to watch all the currencies vs. the USD as well as all vs. the JPY, you will get a much better idea of what I am talking about.

If you can separate a pair into its component parts, analyze the individual currency, and then pair it up with another currency you have some good analysis on, you set yourself up with an edge that traders trading 1 or 2 pairs will NEVER have.

As an example, let’s say your analysis suggests GBPUSD is on the rise, yet you notice the USD in general is doing quite well. So you decide to look around, and notice the AUD is doing quite miserably. Now you might get the idea to go long with GBP/AUD, a rather obscure cross under normal circumstances, yet if your input factors are true, you will clearly have an edge. This is an example of predicting 2 currencies at the same time, but this method could also be used to diversify a position. As an example of that, you might decide to be long the GBP, but against all the commodity dollars (NZD, AUD, CAD) instead of just focusing the risk against the AUD.

I choose to watch the major currencies against the USD since it is the most traded currency, and the JPY since its crosses allow me to play “risk bias” trades. Checkout the AUDJPY (think short) for a nice play using a weak AUD and a risk averse market!

Keep in mind this is more suited to a discretionary style of trade and does take a bit more time to get an idea of where you want to be, but once you have a pair in mind, trading is the same as if you were trading 1 pair. This concept has helped me very much and has given me a better understanding of what is going on in the FX, and I hope it helps somebody on here!

This is interesting and something I will start watching for, sounds like a technique that will take time to develop, but a worth while skill to learn as it is another technique for the tool box.

If you want to get a bit more into this idea, I would recommend looking up the “Commitments of Traders” report (pick Chicago Mercantile Exchange, Futures only) put out by the CFTC every friday. It gives you information about the futures positions (also includes some non-currency futures) being held on the Tuesday before it was released. It’s only for the one day, and it’s delayed until the end of the week, but you can track “weekly” movements of investor interest in the currency.

I would recommend tracking the “Non-commercial Positions” column, as these are the positions held by more speculative groups, looking to make money off of the movements. If you can rig up your own graph with this data, you can start to get a better idea of the underlying strength or weakness of a particular currency.