Trading Two Different Markets

[Prawnsandwich]

Has anyone experienced difficulties with trading two very different markets at the same time such as US stocks and Forex ?

Mainly form the point of view that when you become proficient trading one particular market over a period of time you develop a feel for how that market behaves, and recognition of certain patterns / price action becomes almost instinctual.

So is there a risk that when you attempt to learn to trade another very different market with varying behavior and and patterns, the mental hardwiring developed for the original market can get disrupted?

 

[bbmac]

Personally I look for multiple repeating set-ups on 1 market instrument as opposed to fewer set-ups on multiple instruments/markets. These set-ups work well on this instrument. I can't remember who said it but one well placed trade is better than multiple badly though out trades. Diversification is not all it seems at first glance, indeed the Nobel winning laureats at LTCM thought they have diversified their portfolio when in fact all they had done without them realising in advance was to place the same bet many times over.

I guess it falls into the 'Horsesfor courses' type discussion but there is a lot of sense in your post.

G/L

 

[Prawnsandwich]

Personally I look for multiple repeating set-ups on 1 market instrument as opposed to fewer set-ups on multiple instruments/markets. These set-ups work well on this instrument. I can't remember who said it but one well placed trade is better than multiple badly though out trades. Diversification is not all it seems at first glance, indeed the Nobel winning laureats at LTCM thought they have diversified their portfolio when in fact all they had done without them realising in advance was to place the same bet many times over.

I guess it falls into the 'Horsesfor courses' type discussion but there is a lot of sense in your post.

G/L

Wasn't it the case that they LTCM had factored historical data from a short timespan into their systems...

I also understand that prop firms generally focus traders on a specific market .....

I'm currently expanding into Forex from stocks and am having some second thoughts..although im making progress

 

[wackypete2]

I traded US stocks for many years before I decided to try my hand at forex. You definitely need to get used to different market quirks and develop tweaks in your methods. Once you have it down then trading either market won't make a difference. I don't have a problem trading them since they are different platforms with different ways of setting up charts. It IS difficult trying to trade both markets during the same day so I avoid it. More like madness...who needs that.

Peter

 

[Prawnsandwich]

I traded US stocks for many years before I decided to try my hand at forex. You definitely need to get used to different market quirks and develop tweaks in your methods. Once you have it down then trading either market won't make a difference. I don't have a problem trading them since they are different platforms with different ways of setting up charts. It IS difficult trying to trade both markets during the same day so I avoid it. More like madness...who needs that.

Peter

Interesting stuff Peter, so which market do you prefer or have more success in...?

 

[wackypete2]

Interesting stuff Peter, so which market do you prefer or have more success in...?

I find US stocks easier to trade, but for US citizens there are so many restrictions. Forex offers much better leverage, fewer restrictions, and IMO better platforms. I get more bang for the buck with forex. But for traders elsewhere in the world this might not be true depending on what restrictions/regulations there are.

Peter

 

[Black Swan]

Swing/position trading forex & oil works OK...That's the range of my (trading) diversification...

 

[Prawnsandwich]

I find US stocks easier to trade, but for US citizens there are so many restrictions. Forex offers much better leverage, fewer restrictions, and IMO better platforms. I get more bang for the buck with forex. But for traders elsewhere in the world this might not be true depending on what restrictions/regulations there are.

Peter

Yeah thats the thing with US stocks - there will nearly always be big movers /momentum plays....either longs or shorts....

Are there really that many restrictions for US citizens ?

 

[Prawnsandwich]

Swing/position trading forex & oil works OK...That's the range of my (trading) diversification...

Do you find those markets similar in how they behave BS..?

 

[glyder]

Hi Prawn Sandwich,

I'm beginning to go through the same process of looking at trading US stocks to supplement my forex.
So its a timely thread you have started here.
For me I trade longish term on the forex usually trading 4 hr bars to dailies, often taking market direction from weekly charts.
The US markets should let me trade shorter term from home in the evening after work, so I'll be looking at trades, maybe off 5 minute charts, a change in many ways.
I'll expore and demo a great deal before putting money on the line. I don't even know which type of broker / platform to use yet, (but not MT4. I've established they take way too long to open / close trades on the stock futures they offer). I think I will have to spend some time over at Mr Charts.

 

[Black Swan]

Do you find those markets similar in how they behave BS..?

Hmmm...crude can be a bit tricky but I do use the same strat/edge for fx and crude (other than the take profits targets differ), I do OK..

 

[HowardCohodas]

Has anyone experienced difficulties with trading two very different markets at the same time such as US stocks and Forex ?

I tried trading index option credit spreads and swing trading Forex at the same time. Different mind sets, different levels of attention and different time commitments. I could't pull it off.

At the time, I was happy with my Forex swing trading strategy, but I was actively developing my credit spread strategy. This active development sucked up so much of my mental energy, I did not give my Forex trades the attention it deserved and I let situations that should have been profitable turn into losses. I ended up abandoning the Forex trading.

Now that my credit spread strategy no longer undergoes frequent changes requiring requalification for each change, I have the enthusiasm to return to Forex. However I am doing it more slowly so as not to endanger the strategy that gives me most of my income at the moment.

 

[spy74]

Hi PS, i traded the 6e for a while reasonably successfully and then have moved onto FGBL. I quite arrogantly tried to apply the same set-ups to the FGBL as the 6E and got my ****, very promptly, handed to me on a plate and had to make some changes. i found with FX futs, they would trend quite "nicely", hence my focus was mainly on looking at higher TF's, identifying a trend and using smaller TF's to try locate an area to get on board. With FGBL (which took me quite a while to make any sense of...), I'm more scalping off S&R which i work out before the open, without really paying too much attention to higher TF trends - it's starting to work out well. both very different approaches, and i haven't yet tried to trade them simultaneously.

Personally i found trading FX markets quite frustrating with no open/close trading session, Asia, London or NY all seemed quite capable of kicking off a decent move...

 

[Prawnsandwich]

Hi Prawn Sandwich,

I'm beginning to go through the same process of looking at trading US stocks to supplement my forex.
So its a timely thread you have started here.
For me I trade longish term on the forex usually trading 4 hr bars to dailies, often taking market direction from weekly charts.
The US markets should let me trade shorter term from home in the evening after work, so I'll be looking at trades, maybe off 5 minute charts, a change in many ways.
I'll expore and demo a great deal before putting money on the line. I don't even know which type of broker / platform to use yet, (but not MT4. I've established they take way too long to open / close trades on the stock futures they offer). I think I will have to spend some time over at Mr Charts.

I'm taking a similar approach to Forex and starting to put something together on it....but I've noticed a deterioration in my day trading, which may or may not be linked to taking up Forex...

...could also be due to changing US market dynamics....with stocks apparently teetering on the edge waiting for the inevitable downwards market correction

 

[HowardCohodas]

I'm taking a similar approach to Forex and starting to put something together on it....but I've noticed a deterioration in my day trading, which may or may not be linked to taking up Forex...

Of all the challenges to overcome in successful trading is that of identifying if your system is not working anymore. Here is an excerpt from an article I am currently writing that addresses that concern.

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"What could go wrong?" is the wrong question to ask. If you could answer that, you would have dealt with it in your initial design. The real question to ask is, "How will I know when things aren't working any longer?" How will you decide that it's time to shut down the production line? What resources can you bring to bear on analyzing the problem so that you can get back in production quickly?

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[Black Swan]

Of all the challenges to overcome in successful trading is that of identifying if your system is not working anymore. Here is an excerpt from an article I am currently writing that addresses that concern.



Anyone wanting a free copy of this article when it is complete, PM me.

and so it finally begins...

 

[HowardCohodas]

and so it finally begins...

I am mystified by your response. How should I have handled this?

 

[Prawnsandwich]

Hi PS, i traded the 6e for a while reasonably successfully and then have moved onto FGBL. I quite arrogantly tried to apply the same set-ups to the FGBL as the 6E and got my ****, very promptly, handed to me on a plate and had to make some changes. i found with FX futs, they would trend quite "nicely", hence my focus was mainly on looking at higher TF's, identifying a trend and using smaller TF's to try locate an area to get on board. With FGBL (which took me quite a while to make any sense of...), I'm more scalping off S&R which i work out before the open, without really paying too much attention to higher TF trends - it's starting to work out well. both very different approaches, and i haven't yet tried to trade them simultaneously.

Personally i found trading FX markets quite frustrating with no open/close trading session, Asia, London or NY all seemed quite capable of kicking off a decent move...

Hello Spy..futures is something Ive considered as well.....seems to be the way to go if you're looking to join a prop firm...

How do you find the bund to trade..is it easier than forex, say with more clearly defined trends, less noise etc

 

[scose-no-doubt]

and so it finally begins...

Go on his profile and check his pic BS.

You're telling me that they let this man govern the bank of england but he's not qualified enough to post on t2w?

 

[FX Bandit]

and so it finally begins...

LOL I have been thinking the same thing.