we'll pay more commissions, more spreads, more costs all around, because we think that spread will trend more reliably than an outright, and on a four leg spread there are many, many options along the way
And, you have to have a lot more money in your account. You could achieve the same goal with most of that money out of the account invested elsewhere - true diversification.
Today and Friday are classic examples of this. As I got punished on my EURUSD trade, my loss is first mitigated by the exchange rate USD to CAD since I am Canadian, and spend in CAD. The loss is then eliminated (becoming a significant profit) by the fact that the investment I funneled the previous profits into, is now going nuts.
so far so good I took some profits today should have probably just gotten flat since I am down from the high today but then what? I would just have to put it all back on otherwise, pretty decent activity on the Europe open today no real news, other than the Australian Treasurer doesn't like liberals
Gotta admit. Oldtime, that an occasional second pair from time to time to counter a losing position, does help. Thanks USDCAD for offsetting my losing EURUSD. However, each individual trade is still a directional trade. I am betting on the direction. Aren't you?
it's all size, I try to make the largest winner the largest size, don't really matter to me which one I am right on, but yes, before I put the whole thing on I try to guess on the direction, or at least the intensity