Is diversification necessary in forex?

Beginner Questions
23

Like, HOW? :open_mouth: I tried watching 5 pairs and I already got overwhelmed. :open_mouth:

Good point. I would think that the normal course of action would be to become an “expert” in one pair before adding more pairs to the list?

Thanks for the advice and recos dushimes! :blush: When I was starting out, I was also interested in NZDCAD so might be time to revisit that. :sweat_smile:

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24

OMG I just saw this now. :open_mouth: Thank you so much! :blush: I’ll check out the first 3 pairs you’ve shared just so I already have USDJPY in the mix. :sweat_smile:

25

Yeah. :sweat_smile: I’m more convinced to stick to the least correlated pairs suggested by some of the replies above. :smiley:

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26

Wow. :open_mouth: It’s amazing how you’re able to easily monitor all of these pairs. :open_mouth: Do you try to open trades for each one of these pairs all at the same time? :open_mouth:

27

Link me the thread

28

Hmmm. :thinking: Interesting. :open_mouth: So you often look through most of the charts of the different pairs until you find a trend movement? :smiley: You don’t go to a pair in particular?

29

Thanks Greg! :smiley: That’s also one of the suggestions above. So I guess the challenge is to find more strategies that could work for me. :sweat_smile:

30

Thanks for the reminder Phonix! :smiley: I might have to test out a lot of new strategies on demo with the strategy diversification as one of the goals I have for the rest of the year. :thinking:

31

AUD/NZD, EUR/JPY, EUR/GBP and GBP/JPY are pretty good to start with. They have larger volumes (smaller spreads) than some of the others. Bring up their charts and take a look at them to see what you think. I have no recommendations for the exotic ones because the spreads become insane at certain times of the day.

32

There are some “screeners” out there that can help you. You put in certain parameters (must be above 20sma etc…) and they will spit out the pairs that match. One of them, which I have used, is called Central Charts. They can help you narrow down the pairs to look at.

33

From what I’ve seen of other people’s backtesting some strategies work for 5 years then stop for 6 months then work again for 6 months then stop for a year and so on. Yet the charts for these different periods all like identical - if you didn’t have the dates marked it would be impossible to tell which was which. But it seems to be a real phenomenon.

34

Watching one pair is really boring. I think find a good number for you. It also depends on how much time you have. Maybe you can watch 3 pairs, maybe 8. Try it and see how it feels. Does it feel overwhelming? Distracting? Or manageable?

I’m watching 13 pairs. That’s enough for me. I knocked it down from 40+ to 13.

Right now, it feels manageable.

35

It’s easy to do when you know what you’re looking for.

I only open a trade when I have a decent setup. But I have no problem with having 1 open in each group, simultaneously. It’s not really a good idea to open them all at the same time though, you should try to stagger them because as I said, there is always a certain degree of correlation in the markets.

36

Yeah, that’s right, albeit I do favour the AUD/USD,.USD & EUR/JPY. The difficulty in trend trading FX majors and minors, is that trend trading days are minimal.

Which actually suits me, as I don’t want to sit for hours watching chart price movements.