Amazing Forex Basket Trading

I

increasenow

For me, Forex Basket Trading, is one of the secret hidden gems of Forex trading:

*trade off of strong divergences
*have somewhat of a 'natural hedge' (my opinion)
*profit should come...just let 'it ride' and 'wait' (my opinion)

Here are the current 'loaves' in my "Forex Trading Basket":

GBP/JPY
EUR/JPY
GBP/NZD
EUR/NZD
GBP/CHF
EUR/CHF
GBP/CAD
EUR/CAD
GBP/USD
EUR/USD

(DISCLAIMER: DO NOT TRADE OFF OF THIS IDEA...DO YOUR OWN DUE DILIGENCE)
 
Hi increasenow, this is very interesting. I have a programmer working on a frontend for me to do these types of things: create FX spot baskets and synthetic pairs (Long EUR/USD and short USD/JPY as an example).

Yes, everyone has to do their own DD of course - fully agree. But I'd like to participate in and contribute to a discussion of this type of trading (although I'm sure it can be done in numerous ways).

To follow up on the mentioned example of +EUR/USD and - USD/JPY - one of my favourite crosses is the EUR/JPY. When EUR/USD and USD/JPY moves in sync (both go up or both go down), the EUR/JPY is an excellent instrument to trade.

But sometimes the two pairs diverge - both the Euro and yen strengthens meaning that effectively the US dollar is weakening across the board. When market conditions are like this, my basket is a good example of how to take advantage of the move. I chart this custom instrument, and trade off of it.

I'm not sure how you handle orders, but if you leg into baskets - perhaps you're in higher timeframes? I'm a pretty active scalper, although I don't shy away from holding a day or two.
 
Quote from 4XQs:

Hi increasenow, this is very interesting. I have a programmer working on a frontend for me to do these types of things: create FX spot baskets and synthetic pairs (Long EUR/USD and short USD/JPY as an example).

Yes, everyone has to do their own DD of course - fully agree. But I'd like to participate in and contribute to a discussion of this type of trading (although I'm sure it can be done in numerous ways).

To follow up on the mentioned example of +EUR/USD and - USD/JPY - one of my favourite crosses is the EUR/JPY. When EUR/USD and USD/JPY moves in sync (both go up or both go down), the EUR/JPY is an excellent instrument to trade.

But sometimes the two pairs diverge - both the Euro and yen strengthens meaning that effectively the US dollar is weakening across the board. When market conditions are like this, my basket is a good example of how to take advantage of the move. I chart this custom instrument, and trade off of it.

I'm not sure how you handle orders, but if you leg into baskets - perhaps you're in higher timeframes? I'm a pretty active scalper, although I don't shy away from holding a day or two.
More...
hey there...I've been entering orders exactly at the same time...long and short...really...it has been seeming that you need to hold through the US overnight period to get the most divergence...please share more about your strategy...
 
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