Been trading for a year or so and its been going good but one thing that I have been trying to nail down is taking opposing positions on one currency at the same time.
ie.
Buy on the EURUSD
Sell on the AUDUSD
Now I typically trade off technical analysis and that being said that can lead to different opportunities on different pairs. Should I keep in mind the way that other currency pairs are trending prior to entering my trades or is it something that should be completely separate? When I overlay the two charts on trading view they always seem to be trending together!
Many forex pairs have correlated price behaviour. Often its positive, sometimes its the inverse. Always check the larger picture. It has to be an odd decision that would make you e.g. buy EUR/XXX when all other EUR-based pairs are bearish.
I’m not saying its always a definite no-no, it just needs some extra careful examination.
The shorter the time frame (your trading) the bigger the probability that two currencies might diverge.
Usually, pair trading is not something you do with currencies but if you have strong setups to buy one and sell the other why not.
Just be careful because no matter the fact that you are kind of hedged it is possible to end up with two losers. Two winners situation is also possible.