Favorite pairs. Why? How many?

remember my "rules" are just one approach...you might have a better way of doing this. whatever method you choose, always check your pairs against a correlation table or in a spreadsheet.

i will state again I think four pairs is enough. if you want to trade more markets, then trade different markets like indices (sp500 i recommend), commodities (gold, oil etc) stocks etc.

don't over expose yourself to forex.

My favor pairs are GBP/USD,EUR/USD, USD/JPY and USD/CAD.

However, occasionally, i'm trading practically all other popular majors and crosses too, depending on oppotunity signals.
I never place either long or short positions versus USD in parallel using more than one of EUR/GBP/CHF tools.

Hi my friend ..


it depends on how you r looking to make money .

Some times you can find a golden or maybe a platinum entry due to an important economic data realeased in the US . then you can take a shot on all majors related to USD ..

EUR/USD
GBP/USD
JPY/USD

at the same time ..

but if u like to diverge your choices to lower risks , your choice is good but you may like to watch GBP/USD .i found it's highly volatile . thus u can see clearely when USD/EUR moves 100 pips a day , GBP/USD moves >160 pips .And i noticed that GBP/USD is highly traded during the east asian session when the JPY is moving .
And i think Eur/Jpy is the safer pair to trade . It has no catastrophic turn overs .It's a good choice . But it 's a " turtle " pair .it moves slowly .. U can't take swing trades on the Buy side . The swap fees will crash ur profit .


Any way if u're doing well with these pairs , Good Luck .. and go on ...

When I first started trading FOREX my first thought was to do as many pairs as possible in order to maximize # of pips and make more money.

I began trading EURUSD, GBPUSD, USDJPY, USDCAD and EURJPY. 5 pair for a newbie with no trading experience!!!

Well, result was: 30% drawdown in the first month of my "new trading career"

Of course the main the reason why I kept losing was inexperience and pretty crappy system with many loopholes.

However, had I started off trading one pair alone, my drawdown would have been 10% max.

Correlation of pairs is very important for your risk management. Trading EURUSD, GBPUSD, USDCHF, USDJPY all at the same time makes you excessively dependent on US$.

It's good to trade different pairs and instruments, it helps frequency and differentiate your investments at the sole condition that you trade uncorrelated markets. Trading highly-correlated markets exposes your capital to much higher risk, it virtually would be the same as doubling up # of contracts on EURUSD or any other pair. Same thing.

Now, according to my experience the only pair I would trade in combination with EURUSD is EURJPY. However, I haven't started yet and I am keeping my focus on EURUSD alone for the time being. As soon as I feel I can consistently make money on one pair, then I can take on another one.

I also am considering trading S&P index or T-Bond or Bund...anything that is different and uncorrelated to EURUSD.

Iso, You are so right and the article was very good, thanks alot...

I just have a hard time changing when it aint broke. I am doing Very well with GBPUSD.. I think I will stick with it...

however, if I wanted to find something completely uncorrelated, I woul look at EURJPY...

But I like things simple and GBPUSD has been doing it for me.

Ps, I like your trend line trading strategy... It fits me to a tee.

Thanks Scott

How do you trade the news?

I agree. I like the GBPUSD for the daily range. The next in order are: USDCHF, EURUSD, USDJPY. It's never bothered me that the spread is more than the euro because it is more than made up for by the range.

I also only trade the GBPUSD, but keep an eye on the others because often, the GBPUSD pair do their own thing.

...a ramble

After just over 12 months of watching several pairs, models and reading nearly everything i could...i'm going to cut back on what i'm watching. I'm going to take some of what i've read above with what i've been feeling in my gut and go back to the basics. In pairs to watch i will focus on the EURUSD and the EURJPY.

: ) Thom

My avatar says it all - i started trading only cable about 4 weeks ago. My goal is to become the best damn "cable guy" around

I only trade with the current established by major news releases. These pairs seem to work well. If anyone successfully trades other currency pairs with the news, I would very much like to know about their experience.

USDCAD
EURUSD
GBPUSD

Squat - I love that Avatar maybe shoudl move this to a new thread - but your pairs remind me of a newsletter i get and have been following for several weeks trying to get a handle on a guy named Tom Yeoman's methods. Have u heard or worked with/of him ?

I use eur/usd and gbp/usd.....since they have a high correlation.....on a down trend I short both....vice versa for an utrend.....

What is your logic in shorting both in a down trend? Are you trying to amplify the return? perhaps you could elaborate.. I would be interested in your opinion.

Thanks Scott

Pretty much to amplify my return...If you go to dailyfx and put both currencies on the same chart (1h, 4h, monthly), it is pretty much the same graph......mrgreen posted this site where i picked up some more info on it....

http://www.mataf.net/en/analysis-correlation.htm

Hm, how is this amplification different than simply increasing the position size on either pair?

I agree with Soso.

I'm more likely to decide which one I feel will be the better trade, Open 'x' # of lots and take the other side with the other pair @ 'x'/2 lots.

Close the loser after confirmation.

your right, It made sense when i thought about it, but thinking about now (im at werk btw...lol), it does not....I guess splitting it up between the two gave me a sense of security margin wise, but either way you look at it, it's the same thing....mah bad....ima noob

GBPUSD gives more pips per trade than eurusd on average -- even though they move in the same direction. EURUSD would move 20 pips while GBPUSD would move 30 to 40 pips in the same direction (on average).

I also noticed that when setting my stops/limits....there is a method to my noob-osity after all......lol.....thanks yardie

There is still a valuable thing in your method of both EURUSD and GBPUSD.
If you want to place an order in lets say GBPUSD and you are not completely convinced of the move, often you can look at the EURUSD and even inversely the USDCHF and see if the same move is there as well. If it is, you can gain confidence in your trade in the GBPUSD...