I read someone say he “doesn’t trade pairs” but that he “trades charts.” Do you do the same? I mean like not care what the pair is and just scroll through a long list of charts regardless of what the pair is?
I am of the view that the pair doesn’t matter, as long as there is liquidity and volatility along with it. No volatility normally means no opportunity for price action. For currency pairs (the main 28 incl. CHF), each may have its own response to fundamental or technical (price action) changes, but when it comes down to a setup and whether the pair reach a “zone of interest” for entry, I don’t care whether it is EURUSD or AUDJPY, as long as I understand a few truths - like what’s the spread, slippage, ATR(x), direction one timeframe up and one timeframe down from my preferred (daily), last week’s close, last day’s close, and two others.
I’ve read a lot that as a beginner, I should stick to a single pair, like EURUSD. But doesn’t that limit my chances of finding a good trade entry if I’m just looking at one pair?
My Pro trader friend focuses on the majors, with the substantial trades EUR/USD & GBP/USD. As he’s a mainly a scalping trend following trader, there’s plenty of trade opportunities every day owing to the consistent high volatility in those markets.
As to your question, it’s experience in mind and body that is key to becoming successful. And, IMO, the quickest way to obtain that is to focus on the above pairs.
For long-term trading off D1 charts -
Its very likely that focus on individual chart/candlestick patterns will lead to a blinkered trade strategy execution - thinking such as “This is a classic bearish pin bar on AUD/USD therefore I must get short immediately”. I would ask, what about all the other AUD pairs and what about all the other USD pairs? Maybe all the other AUD charts say buy AUD: and its possible all the other USD charts say sell USD.
And what about AUD/USD’s most correlated partner, EUR/USD? Its going to be a more than brave trader who sells AUD/USD when EUR/USD is in a powerful and consistent uptrend.
Beginners can easily get overwhelmed when trying out different, so it is more easier if they stick with one pairs and try trading from that. If that pair is not turning out to be favorable for them, they can try out other pair that allows them to make a consistent in profit.
Interesting comments that reflect different approaches and overall methods that result in different strategies and plans. Not surprising because “there is no right answer for Forex trading”.
And that is important when it comes to back testing, which I slowly discovered second time around after hours and hours of backtesting.
Some advocates say that a pure strategy and plan (with backtesting) will result in a positive edge that can survive all market conditions - bull, bear, choppy. I actually find that very hard to believe - it’s like the Holy Grail. Does it exist? So I think I have a good strategy and plan for a bull market, and that is why I have taken so few trades in the past four months. I have not developed a plan for choppy markets, or bear markets, and I feel a bit frozen out of Forex, gold and crypto TRADING for a while now.
But that has not stopped me working at all. I have merely decided to take a side step and create a mining opportunity in crypto. Whilst I wait for opportunities that match my plan criteria, I will always find something to do that has a reasonable chance of a better return than our current investments. I see no let up in that until I become mentally incompetent (or has that event just arrived?)
Yeah I do but would be conscious of the pair and have an idea of how it moves against the other
In theory this is what I think will work but in practice… for a newbie, perhaps not the case? Although what is the step by step process for doing this? If not automated, do you mean you check all 28 individually?
Being that you’re here typing all this, I doubt it lol. I have to say though, this IS a great way to exercise the mind what with your lengthy responses! It helps you AND us! Win win lol
Yes, I also check 50 cryptos every week. It’s no big deal. Either the underlying is close to, or ages away from, a zone of interest. It takes literally less than a minute to check if, for example, BTC is bull or bear, in month, week, day, and to either mark it for further analysis, or leave it till the following week.
For those “near the zone”, and that could be 2% of them or 20% of them, there is then the process of determining if indicators align. Let’s say of the 28 currency pairs, 5 of them are near the zone and 23 of them are way out.
So on a busy day (evening or morning) I have perhaps 10 pairs or cryptos to look at and decide whether or not to set a limit order. For cryptos, I set orders often. For currency pairs, it is more likely I wait till market open to decide whether or not to set a limit order.
Don’t forget, all the hard work is in creating the plan, and the plan says don’t trade unless price action is “near the zone” whatever that zone is depending on your plan.
True, I guess it’s really just a matter of building a list and then clicking through it when it comes to checking all x pairs.
I think there has to be some overlap. Trading charts means that he’s using technical analysis only, and while technical analysis is an excellent tool, one has to have at least some tangenial understanding of the fundamentals that affect individual currency pairs, because those fundamentals can be really quite different.
What is this in response to?
Bot identification and murder.