apart from the aussie the numbers are pretty similar, do you agree?
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Quoting soso_betonDislikedHm, that's strange. I see that for 2000-2006 correlation(EURUSD, USDCAD) = 89% while correlation(EURUSD, USDJPY) = 54%, much lower. However I always felt, and still do, that EURUSD and USDJPY are much more correlated than EURUSD and USDCAD . At least since I began trading, around 9 months ago. Anyone else feels like this?Ignored
Quoting CautiousTraderDislikedHi,
Have you ever tried to use one currency pair to lead you to the next movement of correlated pair immediately?
I was trying with EUR/USD leading USD/CHF with the 1 and 10 minute charts but it's quite tricky (I lost...). However, the market was fairly slow. Maybe if there was greater movement there would be more opportunity?
CTIgnored
Quoting diallistDisliked
Before I get to your actual question, allow me to emphasize one very important point. Don't open a mini account unless your account is over $30,000. The farther below $30,000 your account balance is on a mini account is the same degree to which you'll suffer from the adverse effects of asymmetrical leverage. I wont go into what asymmetrical leverage is in this post because it doesn't directly pertain to your question. Let it be sufficient to know that you should open a micro account.
Asymmetrical leverage aside, with only $1000 in your account, you should open a micro account over a mini for another reason as well. With a mini account, trading 1 mini lot on a $1000 account would mean you would be trading at 10:1 true leverage out the starting gate. This is too high for a beginning trader. You will lose your $1000. By starting with a micro account, you'll be able to trade 1 micro lot on a $1000 account at 1:1 leverage. Much more conservative. You will most likely still lose your $1000, but it will last longer, allowing you to place more trades and learn a valuable lesson from each trade.
In your question, you mentioned account size, risk amount and leverage, but you left out two important pieces and that is stop size in pips and pip value.
In my opinion, a raw beginner should not trade over 5:1 leverage. Therefore you should lower the leverage by decreasing your percent risked to 1%
Now you have this:
Account Size = $1000
Percent Risk = 1%
Amount Risked = $1000*.01 = $10
Stop size = 30 pips
Pip value = .10 (10 cents on a micro account)
Total pip value = 30 pip stop * .10 = $3.00
Position size = $10/$3 = 3.33 micro lots (round down to 3)
Resultant pip value = .3 (30 cents per pip)
Resultant leverage = $3000 position size / $1000 account size = 3:1
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Quoting witchazelDislikedHi Dail,
Thanks much for the post. I was wondering if you could explain the effects of Asymmetrical leverage a little more, I understand how you calculate it, i was just wondering what the side effects are.
Is it as simple as getting more trades before breaking or is it actually a reduction in real leverage as you are the low chip player at the table, or is there more too it?Ignored