Need Pair Selection Methodology

Discussion in 'Forex' started by skinny, Jan 24, 2023.

  1. GoldDigger

    GoldDigger



    You need to know whether what you are
    getting into is on an upward trajectory
    and screeners can help with that, as well
    as looking at historical data.

    Currency screeners are all over the place.

    Finviz

    Yahoo

    Trading View

    Those are free, and there are paid ones
    as well.

    Your broker might have one also.
     
    #11     Jan 25, 2023
  2. Not sure if I understand you correctly. With professional forex traders you are talking about the ones employed at institutions or are you talking about fulltime retail traders (for which this is also their primary source of income)?

    I trade 4 pairs regularly, 3 more I watch and might enter a trade. I am a daytrader - in the morning i mark the charts, set the alarms and then wait that price reaches my levels.

    I would never be able to stay focussed if i were watching 30 pairs.
    Also, with watching less pairs you get to know their patterns better...
     
    #12     Jan 25, 2023
    tomorton and GoldDigger like this.
  3. alistera

    alistera

    You pick one you know/can align with, most choose GBPUSD/EURUSD/USDCAD/JPY Pair and make profits, pick too many and you will be a jack of all trades and master of none, the markets will love you for it, as you make profits you can add more then when it goes wrong you hope you kept 20% or 50% of the profits, not 80%, and went back to one pair faster than slower, this is how you make profits slowly and everything else will be how you lose money slowly then all at once, the world is an expert at the latter advice because it's how they make their profits slowly.
     
    #13     Jan 26, 2023
  4. maxinger

    maxinger

    Are you talking about the intermarket correlation thing?
     
    #14     Jan 26, 2023
  5. How do they "cover" the pairs?
     
    #15     Jan 27, 2023
  6. Cover means that they facilitate the buying and selling of those currencies, and will also provide market color.

    I should note that banks and most pros aren’t making markets in spot… for cash markets, almost everything is electronic so just post bid/ask or trade via screens. However, most corporate buyers are doing forwards which requires a market maker (because each forward is otc). Swaps and exotic payouts are also otc, so there will be a trader who covers (provides a market) for that kind of trade (“fx derivatives trader”).
     
    #16     Jan 28, 2023
    nbbo likes this.
  7. Do you mean something a là "Hey big bank, I'd like some GBP" and then big bank is like "Sure corp, how much and at what max price you would like it?"

    And by this you mean that will give their opinion on how things are going/might go? What do you mean by "market color"?
     
    #17     Jan 28, 2023
  8. literally yes, except that the corp is asking for quotes from 3-5 firms so you have 20 seconds to get back to them.

    Yes, e.g. “we just saw an order to buy 50k options on dollar-nokkie” to a trader (either at the corp treasury team or buy side trader) who is interested in the name. Why are traders interested? Because they care about liquidity. If I need to sell a bunch of a currency and am hearing that there could be a big buyer out there, I’ll be asking the bank to see if we could arrange a deal.
     
    #18     Jan 28, 2023
    JonLivingston likes this.
  9. Thanks for confirming. But here's another question: how does trader of big bank know that he can fulfil corp's order, in 20 seconds? Big bank picks it up from its own reserves? If so, what if there's not enough? And I assume this whole process happens because corp has a direct route to big bank right? As in, they have literally an account with them?

    How would big bank trader see this and where? Especially as you say it's "at the corp treasury team"? You referring to big bank trader having access to corp account and balances and movements of resources in/out of their account?

    What do you mean by "name" here? The currency pair in question (dollar-nookie)?

    Thanks
     
    #19     Jan 29, 2023
  10. destriero

    destriero

    “Dollar Nookie” is the relative value of the outcall service provided.
     
    #20     Jan 29, 2023
    longandshort likes this.