Benefits to Specializing in Trading a Single Currency?

[trawlerdude]

This topic has been touched upon in another thread, however, I think many members of this forum may benefit from a thread discussing the merits/disadvantages of trying to follow multiple currencies at the same time.

What do the seasoned traders who visit this site do?

I would consider trying to follow the four majors a difficult task. It is interesting to me that when some post recommendations for trades that they always post all 4 majors at the same time. This would lead one to believe that their movements are inter-related. Any thoughts on this? Can anyone offer there personal style for trading one or more of the majors?

[CentralVenus]

I'm new to forex trading so I may be wrong but I thought they were related. I mean they are all paired to the dollar aren't they? Have a look at the Euro and Swiss. They almost mirror each other in their movement. I don't think I have ever been long or short on both the euro and swiss, they're always opposite. I think that fact alone makes following the four a little less complicated. If you know one is doing one thing the other is doing the opposite.

Barry

[cabee]

You're right on the CHF and&#8364 . At least, they are the closest pairs. If you trade a short time-frame, you might want focus on CHF because of the slight difference in pip value and volatility (to your advantage--that's why the spread is usually wider.) WATCH OUT for "Her Majesty"(&#163)--she has mind of her own! She will teach you to respect her independence!&#165 is a different animal! Particularly, as February approaches, the capital repatriations will start---lots of divergence from other &#36pairs! Also, with CHF and &#165 , there is a central bank intervention threat (not so for&#8364 ) Hope this helps. GL

[BigMacDollar]

This remains and interesting question. I have over the years in training and mentoring traders seen how some choose to monitor all 4 majors as a barometer of what the Dollar strenth/weakness is relating in a global sense. Others choose to focus on the relating pairs, untill the repatriations and interventions start. Others choose to focus on one major and one ccp (cross currency pair) to force themselves to remain focussed on the technical reality rather than any co-incidental relational reality.

Some, psychologically and technically can handle monitoring a spectrum of pairs - These traders are generally settled with their trading disciplines and have a solid grounding in their technical analysis skills. They also possess the ability to remain unemotional and disattached and do not confuse technical realities in from different pairs in high-stress situations.

The novice or new trader will do well to focus on only one or two non-relating pairs untill his/her trading disciplines and methodologies and sorted.

I hope this will help you to rationalise a dicision on this issue.

[daanacker]

Hi BigMac,

For a novice trader like me its very difficult to decide which currency to follow until you have "perfected" your strategy. The recommendations provided by TC makes its even more difficult as you see prospects of huge amounts of money in each of the currencies.

You mention that you went through training and mentoring traders. I trust that it was better done than that of a lot of so-called "trainers" in the industry and that most of your traders are still active traders making money.

What would your advice be to a novice trader regarding which currency/pair of "non relating" pairs to focus on until sufficient confidence is build to explore the others or even four currency pairs?

Danie

[BigMacDollar]

I normally suggest to stick to the EUR/USD and the USD/CHF at first.

Both these pairs give even and generous moves, with low execution costs on the CHF.

The EUR moves nice and steady within a Market Cycle concept and the CHF gracious on any system-based Methodology.

And yes - I am very close to my traders and normally go that extra mile to ensure that they have a surviving edge. Yet - successful trading depends highly on the disciplines and psychology of the individual. As a result I have already filled my quota of new traders for the year, and will as usual do everything for them as well. I am yet to find a loosing trader that sticks to my simple disciplines . . . those that don't stick to my simple disciplines ? - well - I guess we tried . . . .

Good luck,

[daanacker]

Hi Big Mac,

Thanks for the reply, it will help a lot.

It might sound funny but during my "training" no reference was made to "market cycle concept" or "system based methodology". If you can't explain that briefly on the forum, can you recommend some literature on that please (via forum or my email).

In my country there are limited access to "good training". After completing my "basic training" I came home and could not even decide how to identify a possible successful trade, even though companies promise in their marketing that they will just do that.

A lot of "trainers" tell you about the history, development, development of trends, etc of forex, decisions on where to place stops to limit losses, but does not necessarily get into the details of how to successfully identify a trade. They provide you with pages of analyses of primary, secondary and current trends (and in their organisations they differ about the definition of this - how confusing for novice traders?) but not how to calculate support, resistance and pivot points, use indicators and mva's successfully in identifying trades. This I learnt by surfing the web and reading the stuff you guys post on this forum and asking questions about these aspects on the forum. If I knew about this forum 3 -4 months ago I believe I would have been in a much better position than now.

Its a blessing that I am not illiterate and always looking to increase my knowledge - this I am very thankful for - otherwise I would have dumped this as a bad job a while ago.

Thanks again to you guys for not being selfish and sharing your ideas with novice traders like me.

Danie

[daanacker]

Hi Trawler,

Sorry for "highjacking" your thread for my own purpose.

From your membership profile you should be an experienced trader if I am correct.

What did you do when you started trading forex? What would you recommend to novice traders to do?

I like BigMac's recommendation on the combination and is following that to some extent, but are also keeping an eye on the others, especially for those choppy and dead periods.

Are you trading/looking at other cross currencies or do you stick to the four majors? Do you trade all currencies with the same indicators and indicator values?

Regards
Danie