Specializing in a certain pair

i was curious is the norm for "professionals" to just specialize in one pair rather than trade all of them? i currently have 4 screens and watch all the majors. the problem is they often signal at the same time and i often don't know which pair to trade and i wind up not trading anyhting since the time i took to decide cost me a good entry. i only try to get 10-20 pips a day so entry is very important most of the time. i was curious do most of you just trade one pair or know a pro that only trades one or do they watch everything?

For what it is worth, I once saw a competition where the results were posted. It was last winter. The winner made over 6000 pips, I can't remember the duration of the contest. They only traded the EUR on all of their trades. We all know each pair has its own characteristics: speed, range, etc. If you are looking for advice, and I am not a professional trader, I don't see the downside of honing your style and techique with one or maybe two pairs and grow from there.

Check out the championship: http://championship.mql4.com/2006/rules

Go to participants and check out the pairs they trade. Although we are talking about EAs here there are some things that can be learned I believe.

I don't even think you can 'specialize' or be 'proficient' in any particular currency pair. I mean sure you can pretty much gauge past movement and volatility, but that doesn't mean it will continue. I remember reading that USDCHF used to be the all time mover until GBPUSD replaced it.

I feel that all markets behave very similar. They sometimes trend, sometimes they obey the support/resistance, sometimes they obey the ross hook, sometimes they..etc etc. Forex is not a scientific field where you can learn everything about it and draw some kind of scientific rules. It's a dynamic market that changes from time to time. So I say trade all pairs!! .

who knows..maybe a cross currency pair will replace GBPUSD soon..

Myself are very novice, but I feel to learn one pair and be comfortable with it, i.e. How it reacts at certain time frames/day’s, what happens at major news release etc, will be to your advantage in trading and help speed up the time to learn a new currency eventually, as it is previously said, currencies react a lot in a similar manner

Check out the average daily range. I think you'll find that cable has an average daily range over the long term of 150 pips, more than any other. If you're only looking, like me for 20 pips in your favour, should be easy , no?

h

Hope trading gods are with you all? Could anyone tell me what I should know to trade EURO/JPY , can pm me

Thanking you all in advance
Banda

There is no correct answer here - some traders just trade one pair while other may trade several. But let me try and help you a little here...

You mention that often times on the majors signals are generated at the same time and you end up not trading anything. There is a high degree of correlation between the majors so it is likely that if your method is telling you to go long on the Euro, then most likely you will be getting a long signal for cable and short signal for the Swissy.

Simple solution - start by trading just one pair. I personally favour Cable as there is greater volatility than the Euro. Concentrate just on one pair to begin with - this way you will have less to concentrate on therefore less decisons to make therefore less stress. Master the one currency pair - see how it trades in a variety of market conditions. Then if you want to add a second pair consider a pair that has low correlation to your first pair. If you were trading cable then a 2nd pair could be added such as the EUR/JPY.

Good luck.

Monaco

i agree with you but i would caution adding eurjpy to gbpusd since they're fairly well correlated. my research indicates that eurchf goes with just about any other pair (cross or major) as a second pair. also consider different markets like commodities or indices, not just currencies but work out the correlation first.

I only trade the EUR/USD.

I think it also depends on what timeframe your trading.

If your using 5 minute charts its a lot harder to keep up with things looking at multiple ccys than if you are just looking at daily/weekly signals etc.

Bank Traders doing spot FX (depending on no.of dealers within the Bank) will generally be concentrating on 1-2 ccy's each

I would personally caution against only trading one pair. I believe all mkts have a range of modes. Most traders/systems learn to understand the majority of modes for a particular pair but often fail to pick a pair when certain modes come along. If you are trading an uncorrelated portfolio, you are diversifying yourself for when the adverse modes come along which helps smooth out the drawdowns on your account.