Currency Pairs

[nine]

I'm normally a very short term index futures trader but I want to branch into currencies on longer term (daily/4 hour swings and trends).

So for someone in this category what pairs do you guys recommend. Currently I'm looking at these majors and crosses. I wonder what else provides either more diversity or nice tradable trends and pullbacks (most of mine have USD as half the pair)?

Currently:
These majors: EUR.USD USD.JPY USD.CHF AUD.USD
These crosses: GBP.JPY EUR.JPY

So, I welcome opinions on which ones should be included or excluded from a trend/swing trading portfolio. If you want to give opinions for other trading styles can you just point it out for my benefit and that of anyone else looking at the thread later.

Thanks.

 

[gooseman]

personally i think that anything involving JPY is tough to trade as it is quite volatile and you tend to get stopped out a lot even when you're directionally correct.

 

[westernforce]

I didn't see Cable in your pairs you looking at Nine. I think it's sweet, trendie and behaves itself well. :cheesy:

 

[rathcoole_exile]

nine,
as WF says, Cable mate .......

 

[nine]

Thanks guys, I missed one of my majors GBP.USD and I also have GBP.JPY as above.

Would you trade GBP against EUR - what's the spread like on that compared with eur.jpy say?

Is there anything I've got that you don't recommend - I note gooseman's concerns about volatility in JPY pairs. Do others find the same or has gooseman got a love of tight stops? (sorry gman )


Proof ,,, My cable chart from earlier today - nice short for those that were in it.
http://charts.dacharts.com/2007-11-25/kwn1.gif

 

[gooseman]

i'm out of currencies mate-been a while since i traded them. it was too heavily influenced by the carry traders for me and seemed to move on a whim.

i used to quite like usd/aud as a pair.

for insanity see usd.zar

 

[wasp]

Every pair comes and goes in its proficiency, reliability, size and ease. Never found 2 pairs that correlate despite their major partner.

Obviously EU, UJ and Cable are the main ones and GJ and EJ will give great movements. Then you have things like NOK, SEK and ZAR. mental is the best word for them but, on a 4 hour TF, they are tradeable and tameable.

Currencies are renowned trenders but be aware that when they consolidate, they can be harsh. Very harsh.

IMO, if trading 4 hour to dailies on currencies, I'd pick a diverse 10 and look for simple trendline breaks, pullbacks and continuations. Just be ready to let them lie if they start being rangebound.

Here a few threads that may be of interest too...

http://www.trade2win.com/boards/forex-discussion/23672-forex-2007-minors.html
http://www.trade2win.com/boards/forex-discussion/25180-how-many-pairs-your-list.html
http://www.trade2win.com/boards/forex-discussion/25141-pair-day-week.html

 

[Rhody Trader]

It's been my experience that JPY pairs tend to have the cleanest trends and that Cable is probably the choppiest of them all. Cable has this tendency to get very narrow then explode.

The bottom line is that all the majors and crosses are quite tradable with relatively narrow spreads and loads of liquidity. It's worth taking a look at the charts for each to see which seems to fight best with your style of trading.

 

[Devilicus]

For what it's worth, I trade EUR/USD USD/CHF GBP/USD and GBP/JPY (favourite) as a sideline to my index trading.

 

[wasp]

pairs

I try not to watch too many myself....

 

[r.w.]

Would you trade GBP against EUR - what's the spread like on that compared with eur.jpy say?

GBPCHF is an alternative which trends like EURGBP (opposite direction, of course) but with a lot more action to it. Spread and volatility similar to GBPJPY.

 

[nine]

Thanks guys. Much appreciated.

 

[rathcoole_exile]

Cable has this tendency to get very narrow then explode.

QUOTE]

agreed, this can lead to some nice trade opportunities if you're patient and happy to set-up Stop buy/sell triggers to capitalise on breakouts ....

 

[nine]

So, I'm thinking about starting a thread based on trading 8 pairs based on daily or 4hrly signals (eod=globex close). These will be based on limit or stoplimit entries set around eod (because I like my sleep way to much to be awake during US rth.

Currently I have 7 pairs:
These majors: EUR.USD USD.JPY USD.CHF AUD.USD
These crosses: GBP.JPY EUR.JPY

What should my 8th be please? And is it worth doing another "Make Money Trading (forex) thread?"

.

 

[trendie]

how about USDCAD?

around 100+ pips per day range, and spread about 3-4 pips.

I also read somewhere thats its seens as an oil-proxy; dunno if thats true.

you need to eyeball it and see if it behaves in a manner that your rules would catch good moves.

EDIT: yes, worth starting a new thread, or just rename this one!

 

[r.w.]

I also read somewhere thats its seens as an oil-proxy; dunno if thats true.

True. Canada is a major oil exporter - in fact the largest oil supplier to the US.

 

[r.w.]

But actually if you run the numbers right now, usdcad has almost zero correlation to oil. Sure it historically has been high, but right now the loonie is very definitely doing its own thing.

It's something like 0.06 (i.e. near as dammit 0). I ran it on a daily basis back easily long enough to be statistically significant

GJ

Thanks for the update, and apologies for the misinformation. I don't follow cad myself.

 

[Rhody Trader]

So, I'm thinking about starting a thread based on trading 8 pairs based on daily or 4hrly signals (eod=globex close). These will be based on limit or stoplimit entries set around eod (because I like my sleep way to much to be awake during US rth.

Currently I have 7 pairs:
These majors: EUR.USD USD.JPY USD.CHF AUD.USD
These crosses: GBP.JPY EUR.JPY

What should my 8th be please? And is it worth doing another "Make Money Trading (forex) thread?"

Be cautious with your basket and realize the overlaps and correlations. It's really easy in forex to end up with an exposure you weren't intending to trade, and to increase your exposure to one currency to higher than would be prudent.

 

[r.w.]

Be cautious with your basket and realize the overlaps and correlations. It's really easy in forex to end up with an exposure you weren't intending to trade, and to increase your exposure to one currency to higher than would be prudent.

Good point. In particular the crosses need attention. As GJ is the product of GU and UJ, the daily change (for example) roughly equals GU times the daily change in UJ plus UJ times the daily change in GU. So it doesn't make sense to trade a cross unless both factors are moving in the same direction, with exception for carry trade times.

In addition, from a TA point of view, watching a GJ chart and believing that one watches bulls and bears in action is illusory. The liquidity is in GU and UJ whereas the daily turnover in GJ is less than that in, e.g., USDSEK. Based on BIS figures from last year, so I may get corrected again...but the principle still holds.

 

[r.w.]

Sorry but I totally disagree. There are lots of reasons to trade crosses - the world doesn't revolve around the dollar despite what people would have you believe. Depends entirely on how / why you are trading. Sometimes stripping USD exposure OUT of your trading can be a good thing, but I guess it all depends on your level of sophistication when trading. Not everyone is going to come up with relative value / correlation ideas etc.

GJ

I totally agree. But in the context of this thread, i.e. technical signals from 4h charts, one need only pull up charts of GBPJY and USDJPY and compare.