the best diversification

Hi,

I have looked to my forex diary and analysed last 3 months. I use 3 patterns on my entries. I have find out that 2 of them are not profitable in a long run. So i have only 1 pattern to my entries but it is quiet profitable. Now i am considering to diversify my strategy.

What is the most used, and in your opinion better?

3 profitable patterns on 1 pair or 1 profitable pattern on 3 low collerated pairs?

Thanks for any suggestion

Hello Sir, just want to share my opinions with you, so far, what i knew is it doesn't matter whether you are taking 3 profitable patterns in 1 pair or 1 profitable pattern in 3 low correlative pairs, as long as you trade well you will still be profitable at the end. don't over think about this. Better to put more concerns on "why does the pattern works? will it works in the long run? does it works all the time? if it doesn't works all the time, why? in what situation this "patterns" doesn't work well? can i spot the condition when these patterns failed?"

Trade well sir

Don't disgard a tool simply because it isn't profitable over the past three months. Remember the market is longer than that time period. Perhaps analyze the market conditions as well and conclude that the tool is not profitable for those conditions but could be profitable for other conditions.

As well, even if you do not trade the pattern, it may well help as an analytical tool to help you manage open trades or decide when NOT to trade. Don't forget keeping pips is just as important as making pips.

My real life example: Many traders use triangles and Head & Shoulders patterns profitablly...I for some reason cannot make these patterns work. I either get stung on a fake out break or a pull back to the break. While I do not use these patterns to enter (per se) I do use them as analytical tools to help me determine a bearish or bullish bias based on the pattern an how it breaks.

Even though I use a different entry mechanism, the pattern is stll a valid and usefel tool to help me determine other things about the market, such as directional bias and structure.

Trading is more than just entering the market and setting a limit. It is reading the market learning its patterns then exploiting them to your advantage.

the best is to diversify strategies as well as pairs and all of them with no or low correlation. So, in your case, 3 profitable strategies on 3 pairs.

Mates, thanks for your oppinions.

Custos, I know that the best solution is 3 patterns and 3 markets, but now i have only 1 pattern, so it takes a time to backtest other 2 patterns.

If i decide use 1 patterns and 3 pairs what 2 another pairs are you use with the same strategy? What is the best choice? Do you think USD/JPY or USD/CHF (i know that the best solution will be if there isnt USD in the pair, but my broker has a low spread on the USD pairs)

Do i need a lot of backtest another pair or when i trade PA, every pair in forex is on the same principle?

Thanks

I don't know if you are manually backtesting or doing an automatic backtest (programming). If you do the latter, you can try to backtest a basket / portfolio of pairs and look which basket gives you the least amount of drawdown. This is then the combination of pairs you should trade.
You can also do that manually, but it takes longer of course.

Essentially every pair is "similar", but still behaves quite differently. There are some pairs, which are not as good for certain strategies, so I would just backtest each pair you intend to trade.