hello traders im relatively new to trading , though im now live. My strategy is basically to trade currency pairs and indices ect which are ranging between support and resistance.Having lost quite a large amount initially,(this was when i first started). I now usually have one trade open at a time.Basically knowing that the many markets are correlated .Ie gold usually moves in the opposite direction to the main indices.Can anybody suggest which pairs ect dont usually have any correlation , im considering opening more than one trade when there is potentially promising entries. as sort of spreading or hedging my bets
Quite a difficult objective.
You can approach this through elimination but start with currencies and then some key global factors: e.g.
global geo-political risk -
risk down - AUD, NZD up
risk up - CHF, JPY up
global demand for oil -
demand up, oil price up - CAD up
Some currencies have subsidiary partners which usually track what the bigger partner is doing -
AUD and NZD
EUR and CHF
Local and transient risk is also to be considered -
e.g.
risk of Brexit no-deal rises - GBP down
increased prospect of Democrat President in US - DJIA down (usually)
Then there is your own personal exposure risk. You might be convinced by good data that AUD is rising strongly due to reduced global geo-political risk and growing Chinese demand for commodities like iron ore. But at any moment, some contradictory data could emerge from China or Australia, so would it be really wise to have 7 AUD longs open simultaneously?
3 Likes
Hedging means you cover part of the risk on your current trade with buying “insurance”. This is usually done with futures or options. If the purpose of your trades other than your first trade is diversification then you can buy assets with negative correlation because Var(x+y) = Var(x) + Var(y) + 2Cov(x,y) and if corr is negative you will get less variance of returns on your portfolio. Gooogle “correlation tables forex” to see what pairs actually have negative correlation
thanls appreciate your feed back cheers
thanls appreciate your feed back cheers
Why not just trade one or two - but maybe with a bigger position?
Trading multiple markets adds yet another level of confusion to trading.
1 Like
exactly,especially if its an A+ setup. Just increase your lot size, grab those pips and get the hell out. Even compounding that one pair and doubling your money
es i trade most of my account on one trade and top up when needed but with a stop, because they maybe another trade i fancy around support or resistance levels, whilst my other trade open .It may be an indices or gold ,oil or a less correlated pair to the one already active.As you know trading about waiting for opportunities ,Think 1-3 trade open at a time pro ably sufficient
If you will trade in a long run, then that’s necessary. However, if you’re beginner and just learn trading, then it’s better to start with one trade. With a lot of trades, you haven’t enough time to analyse and react quicly on market changes. If you will keep on trading, you’ll be able to do so in the future, but now it’s better to concentrate on one thing and do it at your best 
1 Like
great advice, focusing only on one or two pairs starting out WILL help you. Don’t look at multiple pairs because it will only overwhelm you
Well, like in so many complex issues - it depends.
Right now I’m looking at buying all the strongest base currency pairs and selling all weakest counter currency pairs. Conventional theory would say look at the chart with the clearest TA, and that’s what I’ve done in the past. But if you do what everyone else does you’ll probably get a similar result to the majority - which is not actually very good…
Opening one or two trades at a time is not risky but keep in mind first learn managing the risk of one trade then go for more then 1 trade to open at a time.
Totally depends on you trading strategy and risk management program
if you are trading on time frames witch are bigger than 60minute, you need to trade more than one pair at time for sure
but if you are an active trader who opens and closes multiple positions in day, you will be fine just trading one or two pair at time, the ones who fits your strategy, on the ones witch has the market sentiment and attention
The point really is I might fancy a setup on a pair or commodity ect , though the movement not substantial to close trade ,so whilst keeping the trade open they might be an opening for a scalp on USA/yen or USA/EUR as the spreads are low