NexusFi: Find Your Edge


Home Menu

 





What best 3 pairs to trade for volatility/spread/correlation etc


Discussion in Currencies

Updated
      Top Posters
    1. looks_one gracepips with 3 posts (2 thanks)
    2. looks_two johnnyspreadbet with 3 posts (0 thanks)
    3. looks_3 Quick Summary with 1 posts (0 thanks)
    4. looks_4 wldman with 1 posts (1 thanks)
    1. trending_up 8,738 views
    2. thumb_up 3 thanks given
    3. group 7 followers
    1. forum 10 posts
    2. attach_file 0 attachments




 
Search this Thread

What best 3 pairs to trade for volatility/spread/correlation etc

  #1 (permalink)
gracepips
Northern Ireland, UK
 
Posts: 68 since Dec 2010
Thanks Given: 76
Thanks Received: 43

Hi, I trade live the eur/usd, eur/jpy and gbp/usd with MB trading. But often these pairs move in sync.

I would like to keep my eur/usd and probably the gbp/usd but try a different pair in place of the eur/jpy. Any suggestions? So little correlation and good pip movement is a must.

I had a look at the usd/cad and it does move in the opposite of these usually so its a maybe.

Thanks for taking the time to read this...............

Reply With Quote

Can you help answer these questions
from other members on NexusFi?
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
ZombieSqueeze
Platforms and Indicators
Online prop firm The Funded Trader (TFT) going under?
Traders Hideout
Better Renko Gaps
The Elite Circle
Build trailing stop for micro index(s)
Psychology and Money Management
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
59 thanks
Funded Trader platforms
37 thanks
NexusFi site changelog and issues/problem reporting
24 thanks
GFIs1 1 DAX trade per day journal
22 thanks
The Program
19 thanks
  #3 (permalink)
 
wldman's Avatar
 wldman 
Chicago Illinois USA
Legendary Market Wizard
 
Experience: Advanced
Broker: IB, ToS
Trading: /ES, US Equities/Options
Frequency: Several times daily
Duration: Hours
Posts: 3,507 since Aug 2011
Thanks Given: 2,046
Thanks Received: 9,491


on usd/cad maybe swissy. Look at oil or gold as well then you can trade the risk on risk off trade. Spu is always fun as well...I only trade euro as that seems enough to focus on but the risk trade is always something to view. DB

Visit my NexusFi Trade Journal Reply With Quote
Thanked by:
  #4 (permalink)
 
bluemele's Avatar
 bluemele 
Honolulu, Hawaii
 
Experience: Intermediate
Platform: NinjaTrader
Broker: ATC/TT, AMP/Zen-Fire, AMP/CQG
Trading: TF
Posts: 2,543 since Jun 2010
Thanks Given: 3,803
Thanks Received: 2,842

I think what you will find when considering the top pairs traded that they all are correlated to some degree, some more than others. Some move together, some move opposite then you will see that reverse at times as well.

For example, per heavy fundamental reasons the CHF will move like EUR, but then they will diverge greatly as we have seen lately.

What I have found is the following:

JPY - Big influence on pairs
USD - Big influence on pairs
AUD/CAD/NZD - Commodity pairs (when market does well, they do well)
EUR/GBP - Tend to move in Unison most times, but obviously go through their spats.

If I were trading EURUSD and GBPUSD and I wanted something that has low spread and moves differently then I would look at USDJPY. I know the pair doesn't move much (especially lately), or even that much lately, but I believe that is the lowest spread pair with the highest volume/lowest spread that you will find appealing.

Good luck!

Visit my NexusFi Trade Journal Reply With Quote
  #5 (permalink)
gracepips
Northern Ireland, UK
 
Posts: 68 since Dec 2010
Thanks Given: 76
Thanks Received: 43


bluemele View Post
I think what you will find when considering the top pairs traded that they all are correlated to some degree, some more than others. Some move together, some move opposite then you will see that reverse at times as well.

For example, per heavy fundamental reasons the CHF will move like EUR, but then they will diverge greatly as we have seen lately.

What I have found is the following:

JPY - Big influence on pairs
USD - Big influence on pairs
AUD/CAD/NZD - Commodity pairs (when market does well, they do well)
EUR/GBP - Tend to move in Unison most times, but obviously go through their spats.

If I were trading EURUSD and GBPUSD and I wanted something that has low spread and moves differently then I would look at USDJPY. I know the pair doesn't move much (especially lately), or even that much lately, but I believe that is the lowest spread pair with the highest volume/lowest spread that you will find appealing.

Good luck!

Hi Bluemele thanks for the info. I looked at the USD/JPY and yes the spread on MBT is 1pip but over this past week it has moved between 60ish [AUTOLINK]pips[/AUTOLINK] a day (acording to mataf) this is a 1/3 of most other jpy pairs. I think I'll try GBP/JPY for a week even with the 2-3 pip spread in comparison with USD/JPY the GBP/JPY has moved an average of 160pips per day. Then I may try USD/CAD.

Reply With Quote
  #6 (permalink)
johnnyspreadbet
Kuala Lumpur
 
Posts: 3 since Oct 2011
Thanks Given: 0
Thanks Received: 0

I think a better way to look at which pairs to trade is to look at what system you are using and try to find a pair/pairs that you think you could make money with. For myself I simply could not make money trading the USD/JPY consistently.

I do not know what sort of system you are using, but perusing a chart of the USD/JPY the stuff that I am most suited to would not work. Fractals or break outs wouldnt work for me, pin bars look a bit iffy, moving average based systems - forget it. I am not familiar with fib based trading, or straight trend lines for that matter so cant comment on how they would perform.The point I am trying to make is that if you know what your system can or cannot do then you are alot closer to choosing which markets to trade.

Dont think that by trading more markets you will make more money, it can happen but it need not be so. Knowing one market well is better than being haphazard in three. My own experiences have taught me that everytime I wanted to expand into other market was when I came a cropper.

Trading the EUR/USD seems fine to me, as does the GBP.

For me I trade the USD/CHF, Silver, NDX and on occasion the GBP or AUD.

Good luck

Reply With Quote
  #7 (permalink)
peglegtrading
ho chi minh city
 
Posts: 52 since Mar 2011
Thanks Given: 16
Thanks Received: 9

I'm not sure what your spread is like on XAU but it is by far the best spot market in terms of risk reward and volatility. Average daily range is the equivalent of 300-500 pips. It does not have a strong correlation to any of the major pairs either.

Reply With Quote
  #8 (permalink)
johnnyspreadbet
Kuala Lumpur
 
Posts: 3 since Oct 2011
Thanks Given: 0
Thanks Received: 0

Pip range is all very well and good but a larger pip range will generally also mean a larger stop loss is needed. Kind of defeats the point. However your dead right in saying that gold seem to be less correlated than most other risk assets and is definetly worth looking at (provided your not in ths US where FX gold trading is supposed to now be banned).

Reply With Quote
  #9 (permalink)
gracepips
Northern Ireland, UK
 
Posts: 68 since Dec 2010
Thanks Given: 76
Thanks Received: 43

I just started trading with MB Trading UK and have a live forex account but although I can see XAU in the instrument lists when I try to trade it it says market no available 0r something similar. I have asked MBT about this via email so I'll know soon.

As for style well is all simple. In a nutshell its..."always fading and never trusting the first price"

By that I mean I work with a 30-50 pip SL (hence forex and not futures for money management) I use 3% max risk on every trade and I scale in that 3% risk over 4 entries per trade. So a small probe first and then if |I think I was too early but the trade still looks appealing I will scale in bring my average down. Note this is NOT averaging down I only use my 3% max risk so if price continues against me I'm stopped out, take my loss and move on. It is scaling in. Its simply were most people put all there trade risk on in one go I scale into my position/risk.

But then and this is important if price moves in my favour I add to my positions and then scale out to take profits. You could say I.

1. Scale in incrementally to my trades to get a better price
2. Add to winners
3. Scale out to take profit

My main guides are supply and demand imbalances on the chart (helped by Sam Sieden). So I look for extended moves into either supply/demand to fade. I'm looking at "zones" not precise points.

90% of the time I am shorting a bull run into a higher timeframe resistance or buying a falling knife into a higher timeframe support. But always having my max risk in place and taking my losses when they come. Trapped trders is also a big part of my thinking. I see charts as a visual picture of fear, greed and areas where trades are or will be in pain if "this or "that" happens. No indicators other that price action and loads of chart time. So far things are going well...................but time will tell:-)

Reply With Quote
Thanked by:
  #10 (permalink)
johnnyspreadbet
Kuala Lumpur
 
Posts: 3 since Oct 2011
Thanks Given: 0
Thanks Received: 0


From what your saying about SL I presume you want to trade intra day? Personally I find that real hard going and trading more than one market would be a nightmare (for me). But whenever I have traded intra day I have noticed that end of day correlations with other markets are high, however intra day correlations can often be low.

That is, I have seen parts of the day when the stock markets are up, the GBP is down, the USD/CHF is doing its own thing BUT come the close they have all moved in sympathy with each other.

I have often wanted to capitalise on this but my inability to follow my own rules intra day means I failed thus far to do it.

Reply With Quote




Last Updated on January 12, 2015


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts