Thats a good question. Probably in the early stages of a leg it doesnt matter. Its only when the trades build up you will need the hedge. I know we are not trading corelations here but if you look at any 6 pair basket, at least a few are somewhat corelated. As an example eurusd long, audusd short. If you have a few longs built up in eurusd and it starts to drop, good chance audusd will drop too and you will pickup shorts to balance out the exposure.
I think that is the advantage of only trading 6 pairs as opposed to the 14. No one has really talked about it, but exposure to a certain currency (long or short) is really the key. Too much exposure in one direction and you can get big drawdown, too little and you wont get a equity pop. Trading 6 pairs its easier to balance out the exposure with less open trades. And I like less open trades. pretty scary when you got 36 open trades running and your 10 open gbfchf longs start to nose dive off the cliff.
I think that is the advantage of only trading 6 pairs as opposed to the 14. No one has really talked about it, but exposure to a certain currency (long or short) is really the key. Too much exposure in one direction and you can get big drawdown, too little and you wont get a equity pop. Trading 6 pairs its easier to balance out the exposure with less open trades. And I like less open trades. pretty scary when you got 36 open trades running and your 10 open gbfchf longs start to nose dive off the cliff.