As you know, some pairs are very similar in their movements, for example, the GU and the EU have often moved in tandem. I’ve often seen the same and simultaneous set ups on the GY and the EY. My question is: Do you take them both if they both fit your criteria?
One of my rules is that I don’t take duplicate set ups on two separate pairs if the pair is moving in tandem. Trading duplicate set ups seems a kin to making the same bet twice.
I never do it, always, always, protect capital. I don’t think in terms of how much I can make on a trade, I think of how much I can lose. Correlated trades are a sucker bet.
What a good thought about thinking in terms of how much you can lose instead of win, I believe it is the foundation of leverage and trading in Forex. Even though some pairs are similar, there are many factors that can affect them separately (economic scenario of each country), so for me same bet on 2 different pairs is a bad idea.
Dahlia, If you think you have a decent trade, go ahead and take it. Just don’t turn the trade into a possible double loss by making correlated trades. I call it a sucker bet because when you feel like you can make twice the money by taking two trades, Murphy has a way of popping up. Take the trade you feel the most comfortable with. If you win, be happy with the gain. If you lose, you don’t lose two trades at once.
You�re right about separate facts for currencies. However there are some ones with a little relation. For example I�m trading EURUSD and GPBUSD at the same time. I sold in both of them and I�m earning at this moment almost the same amount in ach one, but taking a good view in the first one there was a moment when it went up while the other remained downward. Sometimes you can trade two sometimes not. I like this �Take the trade you feel the most comfortable with�, for me one of the best advices here.
As soon as I read your post, I began wondering, how safe is to make a double trade for a beginner like me? I tried it once and let me tell you, it was horrible. I lost like 1/4 of my total amount of available money. How do you manage to do that type of things, please help me here.
The G/U, E/U pairs are not 100% correlated, take the charts when King was
speaking on Wednesday, the G/U was dropping like a stone, but the E/U was
holding it’s own.
That is just one example, it does occur more times.
As long as you get well informed, and you have a certain possibility of winning twice just go ahead for it, although it is not totally safe for anyone just use a risk management treatment. I believe for a beginner is just matter of experience, and check the trend with some good indicators.
I’ve been using the Williams Percent Range to make the analysis, I’m aware that using being only based on one indicator to trade is kind of dumb, really dumb, do you know of any indicator that might complement itself with the William?
Its really not that tough, look at the daily chart from the last few months. There are pairs that are correlated that usually aren’t. The market is always changing. Don’t only pay attention to old rules of thumb. That type of thinking will get you a van down by the river. If they look the same, then don’t take them. That is real life advice, not flash in the pan advice. Don’t worry about what you make, worry about what you lose. The market is easy to trade now, but it will bite back soon. Just my 2+2 cent advice.
So I think I’d agree if you were actually betting on your trades. If, however, you are trading with a plan, analyzing the charts, and your strategy shows both “correlated” pairs should be entered in the same direction, there is no reason, in my opinion, not to enter both trades. In this regard I wouldn’t even consider any pairs correlated since, when you look at them objectively with a proper strategy, they are all unique and separate.
you are right some times they are correlated but GU and EY are really volatile.Sometimes they move over twenty pips at a time and it’s great when you are on the right side but hurts when you get stopped out constantly.I only trade them when i aim for 100+ pips trades other than that i will avoid trading them.
Agreed, only go with a double trade if your strategy says so; don�t use the same strategy on two different pairs that seem correlated. Compare the charts with all the tools you have handy, check the news about the currency. Simply keep looking the charts and check how the trend is going on both pairs.
If they look the same, then don’t take them. That is real life advice, not flash in the pan advice. Don’t worry about what you make, worry about what you lose. The market is easy to trade now, but it will bite back soon. Just my 2+2 cent advice.