Just wondering how many currency pairs traders are trading here? Also, what if you could post your opinion on the advantages/disadvantages of specialising in one currency pair compared to diversifying over a few currency pairs. I am currently trading 4 currency pairs in total, but I make the biggest gains on the EURUSD and GBPUSD. I guess the biggest advantage of trading one currency pair would be the fact that you will learn far more about that currency pair's traits, whereas trading a few currency pairs would make that a little more difficult (day traders). On the other hand, the benefit of trading a few currency pairs would the fact that you could pick up on a winning pair, even if losing on a different pair. What are you thoughts?
I mostly day trade. Rarely into roll over. I used to trade the big 4 ... eur, cable, yen and swissy. at once. That was too much for me. As it is my trading style is like driving ... gotta keep my eyes on the road. That said, I now focus on the euro. I watch 4 time frames and scalp the 5 minute using the 15 and 30 minute so as not to fight the trend and the 1 minute to time entries and exits. If the euro is putting on a big trending move (not a spiky move) I'll look at the other 3. The cable tends to trend with the euro and the yen and swissy go opposite. I might toss in a trade on those because it's free money as long as it's not getting close to what I feel will be an exit. In summary, I think you might find it much more profitable to really learn one pair or better yet, one pair at a time so you'll be fluent in all 4 for when your pet currency is flat and consolidating. YMMV.
I was thinking about trading the USDJPY or the GBPJPY. What is the best time frame to trade these pairs? My strategy is really quite simple. I may have a position for 1-3 days. I follow the primary rule of trading (for me), "cut your losses short, let your winners run". So, I don't really need to keep an eye on the markets as much as yourself. Good advice though.
I thought you said you day traded now you say 1 - 3 days? In that case the above advise really doesn't apply. Anyway, I never trade the second and third tier pairs like the cable/yen so I really don't know when and how they trade other than the spreads are way to big and the movement way to slow for me. Even the cable AKA "The Tank" is way too sluggish for me to day trade. I trade FX from 7:30 - 10:30 EST max unless there are some nice grinding moves into the afternoon (bearing in mind that my idea of a swing trade is anything less than 6 hours and more than 1) or it's raining and I can't set a tee time. In that time frame there can be trading ranges of 25 - 100 pips ... that's more than enough movement for me to get my taste. It's not like I trade all day ... 2 - 3 hours of focused trading in the AM and I'm done for the day.
I look for moves on a 5 min chart, confirmed by 1 day chart. I can hold a position for up to 3 days. I thought this was still classed as day trading. That certainly explains the different, anyway.
Day trading is in and out of a position in the same day. So, are you profitable? That's all that really matters.
My mistake. I was under the impression that day trading also covered traders who used intraday data. Yes, I have been profitable since December/January (started in November), so I still have a long way to go in developing and optimizing my trading skills.