Advice on trading pairs please


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  • #1872
    James Dallard
    Participant

    Hi Rich, I read somewhere that when trading on many pairs at the same time you can actually be increasing your exposure to risk by betting on pairs that are correlated. For example betting long on eur/usd and eur/gbp and eur/jpy at the same time means you have 3 pairs related to the euro, which if the euro goes the wrong way, you get potentially 3 bad trades rather than one. Do you have any advice on this? May it be better to trade on unrelated pairs or does this not matter too much ?

    #1877
    Rich FittonRich Fitton
    Keymaster

    Hi James, the major markets all have their nuances and move with sufficient independence for our purposes.

    e.g. 2 USD markets might display a similar price movement on the chart but the objects we look for – the MOR, control, S&R, fib levels, potential reward:risk, etc – will all be very different.

    I’d just focus on sticking to the highly liquid markets (the ones with the tight spreads). Start with the full basket and let your analysis filter out the best candidates for trading.

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