Been a fan of GBPUSD for long, but now both economies are becoming so unpredictable that I am looking at other currency options. Wondering what other traders are trading these days?
EUR/JPY Break of 127.07 will target 61.8% retracement of 137.49 (2018 high) to 114.42 at 128.67 next. Sustained trading above there will target 137.49 next. However, firm break of 119.31 will argue that the rise from 114.42 has completed and turn focus back to this low.
I trade almost only long-term (2-5 days holding periods on average) off the D1 charts. I trade every pair - trend-following where there are trends and break-outs where there are not. But I do take into account how bullish/bearish are the major currencies across the 28 major pair charts - I am rarely short AUD for example, no matter what a candlestick pattern is showing, if the other 6 out of 7 AUD charts are bullish for AUD.
CME FX Futures - Long Only EU BP SF JY 48 hours max position time For example, here is a setup in the BP of my simple knife catching strategy.... I'll buy each successively lower hourly close below 1.3547 and look for price and the daily MA (yellow) to meet for an exit.
I mostly use futures, for a number of currencies. GBP is one of those. The change in volatility of the GBP contract is not much more than the other currencies at the moment. So I would not call it "unpredictable", or more unpredictable than other currencies. Besides the futures am I running an experiment on EURUSD, having a mean-reversion system place automated trades.
I did give futures a thought before delving into forex, but found the higher spreads a bit unsettling. Liquidity is so less in futures market compared to currencies, that also translates to lesser leverage isn't it?
I have always found safety in CHF, EUR, USD, and rarely trade against the trend. But that is perhaps because I trade smaller timeframes, where tensions are an all-high. As a beginner I was clearly impatient to wait around more to learn the nuances of D1, hourly and minute charts seemed quicker to grasp at the time. But really, is D1 realy a handful it's made out to be? TIA
If we take the GBP future as example, one contract represents 62,500 GBP. I don't know how large your forex trades are, but to me that seems quite a lot of money. The price of the contract trades in 4 digits (e.g. 1.3579 USD). Which means that one tick represents a value change of 6.25 USD. See here for more contract details: https://www.cmegroup.com/trading/fx/g10/british-pound.html How this compares to your forex trading may depend on the leverage which your forex broker gives you. I don't trade these futures intraday so I don't know how tight the bid/ask spread usually is. You would have to take a look for yourself to get an impression. Lesser leverage has one benefit: your account won't get a margin call as quickly.
The D1 time-frame isn't an issue - I set entry orders based on lower daily highs in an uptrend or higher daily lows in a downtrend and walk away. The issue is the pain in remaining in a trend-following position with a very wide SL. Forex D1 trends are common but stutter twice a week. These days I am taking a small bite with a narrower stop-loss and an unambitious TP, and then getting back in again asap on recovery from the next weaker bar.