Out of curiosity, how many different currency pairs do you trade? Regardless of whether your on a demo or live account, I just want an idea. I’m currently demoing three currency pairs and I’m struggling to keep up, might just drop to one. Anyone who trades live/for-a-living only trade one currency?
As a general rule, the shorter your timeframe the fewer pairs you should trade. Short-term trading demands a higher level of immediate focus and concentration. If you’re trading too many pairs you run the very real risk of missing entry and/or exit signals and severely hampering your performance. Longer-term traders, meanwhile, generally need to track more pairs to make sure they are generating a sufficient number of trades to make it worthwhile.
Either way, you have to be careful about having multiple positions on which might be creating larger or different risks than you planned on.
I look at 19 pairs and trade on daily charts. It generally keeps me in the market with a few trades at any given point in time.
Only one: EUR/USD.
Mostly EUR/USD. Main reason is lowest spread.
I scalp the EUR/USD and USD/JPY. Very short term so the low spreads help.
AUD/USD and pairs with AUD in them, sometimes I look at EUR/USD and the other majors.
Only E/U, because of very tight spreads (0.9 - 1.3)
I watch 11 pairs, mostly the majors and comdolls and just a few popular crosses for trade set-ups, but I enter TP and SL points as I enter a trade, so it takes very little time to manage after entry.
I watch 3-4 pairs but only trade 2 unless I see something that I can’t pass up.
Primarily I trade the G/J and to do that, you have to watch both the G/U and the U/J, and then I trade the U/C…
I used to try and chart ten pairs for a number of different systems that I hoped would be successful. I found that there was often just too much redundancy in the trades and far too much to keep track of, especially if one tried to chart the higher timeframes so as to inform the movements of the shorter.
Then I read opinions from a couple veteran traders who said you should try and trade no more than six pairs at a time, breaking them down so you can still get good volatility yet avoid too much correlation.
I spent several days (and many hours) looking at compiled data on Mataf to work out which pairs I should concentrate on, for all my trading strategies. I now have decided to eliminate several redundant pairs and just focus on these six:
GBP/USD
EUR/USD
USD/CHF
GBP/CHF
GBP/JPY
CAD/JPY
Now, the GU and EU often have positive correlation and they often negatively correlate with UCHF, so I might have dropped GU. But too many strats focus on GU, so I wanted to keep it (and it has been somewhat independent from EU during our recent history). I could have added EUR/AUD for another Euro pair (and the chance to add a a pacific currency), but I didn’t like the high spreads combined with the much lower Average Daily Range.
With these six I get: 3 GPB, 3 USD, 1 EUR, 2 CHF, 2 JPY and 1 CAD. I eventually felt these six gave me high volatility (check the ADRs for most) along with just enough correlation to understand what the market is doing at any given time. But by minimizing my trading to these pairs I can avoid “doubling up” positions on a lot of the same market movements.
if you or anyone else would like to see the pages on Mataf where you can determine the ADR/volatility of a pair – and the correlation of any set of currency pairs, you can try these links:
[B]Forex Volatility - Mataf.net[/B]
and
[B]Forex Correlation - Mataf.net[/B]
John (Merchantprince)
[I]“Nobody can be exactly like me. Even I have trouble doing it.”[/I]