Ive been trading for 2-3 weeks now and im curious to hear how many pairs other newbies are trading at once. the most trades i have open at once is 3-4 and they would include the majors and crosses. do you think that 3 trades open at once is too much?
Id say it depends on your strategy.
My goal is to get in and out in about an hour or two, I keep an eye on about 7 pairs, and I focus more on if each pair has the right indicator signals. Hope my personal strategy helps.
Watch all the majors
Ewhen u become comfortable all the majors then keep increasing the no of pairs gradually…
ok cool. ive been looking at all pairs and then narrowing down my choices based on setups and what i think
There is nothing wrong in watching many… But at the initial stage keep it limited… When u keep practicing only few pairs u will learn the fundamentals of those and how it reacts to news and certain support and resistance areas… So once u r comfortable with these majors it will give u some idea when u try crossess…
I have been watching and trading only EURUSD for the past 15 months… Now watching GBPUSD but not yet started to trade GU…
Trade as many as you can while maintaining your risk profile. I am in 16 today. Watching many more. I would put on positions with 30 if I had the set-ups.
Keep your eyes open on market and try to trader with two to three major pairs.
Hi Krash,
There’s no definitive answer to this, but here are some things to consider:
To gain real benefits from diversification, conventional wisdom is that upwards of 10 pairs would need to be traded. However, this advice comes from the hedge fund world where research tends to focus on stocks, which are generally more heavily correlated (i.e. move together and add hidden risk to a portfolio). The low correlation between many currency pairs means that you won’t need to trade as many to diversify well. You could read this article that I wrote about diversificationand portfolio theory to gain a fuller understanding of the benefits.
You can have diverse strategies as well as diverse markets. Some traders will only trade one pair, specializing in it, but use different tactics at different times, which can help to smooth the equity curve.
Remember that managing risk is more important than diversification. So if your account is small you may not have the option to diversify safely across more than two or three pairs. Also, as you reduce your position size to trade more pairs without increasing risk, remember that if your broker charges commissions then these fixed costs may increase as a proportion of your profits.
To watch a well diversified portfolio is as fascinating as watching a market itself - although you might not know exactly how the magic trick is done it is thrilling to watch. Diversification is one of the few “free” edges that a retail trader can access - make the most of it.
Best of luck!
Nick
That depends 100% on you and there is no one right answer. Just stick to your strategy and risk management (since you are a newbie I am sure you will adjust it after x-amount of losses until you improve your results).
You’re slightly asking two different questions there, if I may say so: firstly, how many pairs should you trade, and secondly how many trades should you have open at any given time.
First up, I’d say that there’s no ‘should’ - all sorts of different approaches can work profitably, as long as the trader in question understands what they are doing and why they are doing it, context is everything in trading. Personally, I feel that a chart is a chart, so I trade a lot of Pairs, over 20. But equally people make money just trading the Majors, or just trading one Pair. Just trade what you feel comfortable with, and what makes you money consistently. There’s no universal right answer, in my view.
To take the second question, that is really a question of overall exposure to the market. What percentage of your account are you prepared to have open on the table at any one time? For me it is 5%, I risk 1% max per trade, so I am happy to have up to five exposed trades at any one moment. When starting out, I think just one at a time is plenty, but again we’re all different.
Just take baby steps at first and you will find that you gain your own feel for the market, and what helps you make money.
ST
It depends on the trader’s trading strategy and risk management.
Trader can do trading in different pairs, at same time he should not open many positions that make hurdle in money management. I usually trade in one pair. It is not necessary to trade in one pair all the time. Trader can chose any best pair according to market situation.
im focusing only on EUR/USD for now
I’m trading around 16 pairs, but since I have a system which is nearly 100% rule-based and that includes Ichimoku, it is very easy to read, it only takes me 5 min every morning and 5 every evening to scan through all my pairs and decide whether to enter or not.
I look at 28 pairs.
In my opinion it pays to keep an eye out for any pair that is trending, simply because the trend is your friend. Unless your using a consolidation strategy.
For me, I focus one pair at a time. It’s because most of the currency pairs especially majors correlates.
For example if USD is becoming stronger , most of the time other pairs with USD will be in direction of USD too.
If you use then several pairs with USD in it then it’s like your are over trading with regards to high risk exposure.
Is your question about quantity of trades or pairs?
I would say there are 8 currencies you should be looking for: USD,EUR,AUD,JPY,AUD,NZD,GBP,CHF.
Also, study the markets sessions (ASIA, EUROPE, AMERICA) then mix and match the pairs!