I’ve been trying to figure out how to trade during the volitile times when data is released, when I realized(some probably already know this) that various currency pairs are either directly realted(one goes up the other goes up) or inversely related (one goes up the other goes down).
So I put it to the test on my $350 demo account. This morning the CAD was releasing their interest rate statement, a perfect time for volitality.
So I entered a BUY market order on the CAD/JPY with a trailing stop of 25 pips(this would make money if the canada dollar got stronger, considering the JPY has been rather weak also) .
Then, at the same time, I placed a BUY market order on the USD/CAD with a trailing stop of 25 pips (this would make money if the canada dollar got weaker, considering that this pair has been highly oversold for some time).
Well the news came in things moved quickly the USD/CAD was stopped out loosing -$26 dollars while the CAD/JPY climbed and trailed to stop out making $120.00 so the overall profit was $94.00 which aint bad for a one day trade.
Remember this was just testing on my demo account.
I’ve tried entering long and short OCO positions on the same currency but that didnt seem to work but using the trailing stop seems to make more sense.
This was the first time I tried this and I know this was probably luck and it may not work every time but do any of you “elders” out there have any insight on this type of trading? is this Hedging?