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How Many Forex Pairs Should You Be Trading?

Some people choose to focus on trading one pair exclusively. Other legacy traders trade about 28 different pairs. I've heard some traders say they trade all possibly available pairs including exotics. What do you think? I'd like to hear from you.

In a private symposium in Las Vegas, Nevada sponsored by an elite circle of international forex traders, they debated about some of the most sensitive topics and several ways of effective risk management. One of the most important topic was, how many currency pairs should we focus on during trading sessions? What is the right balance between our abilities and the optimal number of seized opportunities? Does more trades mean more profits?


Among all the currency pairs excluding the exotics, here we want to focus on eight major currencies. The USD, Euro, Pound, Aussie, CAD, NZD, JPY, CHF. If we take a combination of those eight major currency pairs and minus one, we will come up with 27 pairs. We don't usually include EUR/CHF as it is the least trending pair and through history does not really get anywhere hence earning potential is low. In layman's term, it's simply not worth your time.


Focusing on the question of how many forex pairs should we be trading and looking at it at different angles might just be integral in changing your forex trading forever.


If you trade a lot less than 27 pairs, like one, two or four pairs, I would like to explain why that might be a gigantic mistake and why the mentality of focusing on one pair is just downright silly. With 27 forex pairs in your watchlist, combined with our strategy, algorithms or indicators and other tools that we use, you would have potentially 27 good chances for success. Many people don't see this. Some people only trade the EUR/USD because they are sure that it is the most liquid pair of all, or they believe that the correct path to benefit is mastering one currency pair and how it moves. That is just absurd.


Liquidity means the ability of an asset to be sold and bought immediately closest to the market price.

The EUR/USD is easily the most liquid pair accounting for around 29% of all transaction volume. This is the reason why many consider just trading this pair. However, most professional traders believe that EUR/USD is not a great pair to trade specially if you are a newbie.


So if you are a beginner and insist on trading only one pair, for your sake, don't make it the EUR/USD.

Some people who want to focus on one pair since they want to be good at that one pair before moving on to other ones is proof that they don't know much about the forex market. Just because the GBP/USD likes to stay in a range or AUD/NZD likes to trend doesn't mean it's going to do that in the future. Any currency pair trends, falls in a range, consolidates or just might go crazy after that. Better erase this mindset from your brain if you want to have a future in the forex market.


Currency pairs don't have their own unique movement. The volatility might be specific for a pair, but never the movement. If someone did well trading EUR/JPY, it's not going to be like that forever. Pairs are bound to change their movement depending on so many variables.


Moreover, I can't underline this more. I trade using the Daily charts of the H4 timeframe at least. I believe that more than anything, the daily chart is far superior when you are using trend follow strategies. Trend following is also statistically proven to be the best method of trading. Every technical tool simply works better and consistently on the daily charts than any other chart out there. This is say from 12 years of trading experience.


Every time the daily chart turned more consistent results even if we use horrible tools. Trades win more often, and we don't have to spend more than 20 minutes managing our positions.


The biggest reason why we should be trading more currency pairs is that by trading less, we are severely limiting ourselves and the opportunity that could have brought us the profits. We want to have a more balance system in place and make a lot more money than others who trader with just a few currency pairs. If we trade with 27 pairs and even include the exotic pairs, we would have much more opportunity for success.


This is how we make the best possible chance of creating profit in the forex markets. Get your algorithms straightened out, duplicate it 27 times, trade off from the daily timeframe and we are always going to be in a comfortable position. Using these ideas, we would certainly be more ahead than most traders in the market. Our goal should always be to increase our chances of winning. At the end of it all, it's all about winning and keeping our forex accounts healthy and green!


These ideas do not constitute financial advice. Trading Forex and CFDs have risks involved. Only trade with money you are willing to lose.
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