2 basic questions about pairs picking

[alexthefrench]

Hello guys,

I have some questions regarding the issue of selecting the "most ideal" pairs of currencies to trade - for a day trader.

Do you guys think :

1) Is it better to consistently trade the same pairs.
2) Or using the trendiest pairs of the last couple days/last week.
-> Then, comes the question of what are defined as the trendiest pairs, and what I thought was to measure this with the relative strength. We pair the best and least performing currencies together, only using currencies of the majors.

I'm not a scalper, more kind of a day trader so the spread doesn't come into consideration as much as my broker offers good spreads even on the minor pairs (EUR/AUD,GBP/JPY, AUD/CAD...).

Is there really a way to use relative strength to select some currencies to day trade, and that could be increasing our odds of profitable trading ?

Sincerely yours,
alex.

 

[Pat494]

There are some currency comparison EAs around.
They do show something. Not just random but not it seems very certain results imho.

 

[alexthefrench]

The concern I'm asking myself with the relative strength is: maybe the move is over.

Sticking to a couple, consistent, pairs is better to know the typical reactions maybe, but it is not necessary ideal in the sense that there is maybe more action elsewhere.

Mike Bellafiore wrote a good book, One good trade, where he recommends to day trade stocks experiencing current activity or so. I thought maybe there would be a good reason to try this on our forex pairs too, but definitely can't see how to select the best pairs right now for day trading.

 

[EnlightenedJoe]

Is there really a way to use relative strength to select some currencies to day trade, and that could be increasing our odds of profitable trading ?

Many will claim yes. But not one will be able to demonstrate how.

But to answer a philosophical question of is there easy money in financial markets. The answer is absolutely not. It is more difficult to make money from the markets than most other ways of making money.

But if you are foolish enough to put in the time, effort, and money, eventually you may get a return. To arrive at that point, the difficulty is no less than doing one or two PhD's. Few could afford that kind of costs.

Even former bank traders don't dare trade the markets. They sell your courses instead.

 

[alexthefrench]

I know it's the hardest job in the world indeed, the point wasn't there.

My guess is that to make money one needs to find a system with an edge, control the risk, and repeat it over a sample of trades. a statistical viewpoint so.

The concern, therein, is to find some technics to increase the statistic in one's favor.

I wasn't aiming to ask for ways to have easy money, just other people's views on the topic of relative strength. (which I've never investigated before)

Friendly yours,
Alex.

 

[piphoe]

I know it's the hardest job in the world indeed, the point wasn't there.



Friendly yours,
Alex.

lol :cheesy:

 

[Dowser]

Have you read the 'Correlation Trading' thread by NVP and the '3 Ducks' thread by CaptainCurrency? I think you may find them useful.

Bon Courage

 

[EnlightenedJoe]

Have you read the 'Correlation Trading' thread by NVP and the '3 Ducks' thread by CaptainCurrency? I think you may find them useful.

Bon Courage

Are those relative strength based ?

 

[Dowser]

I may be mistaken, but I think NVP's indicators are designed to show the relative strength of one currency against another.

 

[tomorton]

I'm no day-trader but from what I see, those who are simply buy what is going up, sell what is going down. Avoiding buying going into resistance, avoiding selling going into support. Avoiding NFPR's and suchlike news events. Indicators don't have to come into it unless you want confirmation that a counter-trend pull-back is serious enough to trade.

On the other hand, almost all day-traders throw money away faster than a drunken sailor. Do you have to trade intra-day?

 

[alexthefrench]

Thanks for the links guys, I'll watch them.

I'd prefer to be a day trader rather than a 'swinger', otherwise I'd be checking the screen all day long.

 

[tomorton]

Thanks for the links guys, I'll watch them.

I'd prefer to be a day trader rather than a 'swinger', otherwise I'd be checking the screen all day long.

What?

So you day-trade to reduce your screen time? So how does that work? And is it more profitable per hour?

 

[EnlightenedJoe]

He probably meant he wants to trade on a daily basis. In other words a short term swing trader. Quite understandable if he hasn't time for swinger parties, needs to use the time to trade for monies.