Been a fan of GBPUSD for long, but now both economies are becoming so unpredictable that I am looking at other currency options. Wondering what other traders are trading these days?
Which currency are you trading? - EUR/USD/AUD/JPY?
- Thread starter shriekpurser
- Start date
I trade almost only long-term (2-5 days holding periods on average) off the D1 charts. I trade every pair - trend-following where there are trends and break-outs where there are not. But I do take into account how bullish/bearish are the major currencies across the 28 major pair charts - I am rarely short AUD for example, no matter what a candlestick pattern is showing, if the other 6 out of 7 AUD charts are bullish for AUD.
I mostly use futures, for a number of currencies. GBP is one of those. The change in volatility of the GBP contract is not much more than the other currencies at the moment. So I would not call it "unpredictable", or more unpredictable than other currencies.
Besides the futures am I running an experiment on EURUSD, having a mean-reversion system place automated trades.
I did give futures a thought before delving into forex, but found the higher spreads a bit unsettling. Liquidity is so less in futures market compared to currencies, that also translates to lesser leverage isn't it?
I have always found safety in CHF, EUR, USD, and rarely trade against the trend. But that is perhaps because I trade smaller timeframes, where tensions are an all-high. As a beginner I was clearly impatient to wait around more to learn the nuances of D1, hourly and minute charts seemed quicker to grasp at the time. But really, is D1 realy a handful it's made out to be? TIA
If we take the GBP future as example, one contract represents 62,500 GBP. I don't know how large your forex trades are, but to me that seems quite a lot of money. The price of the contract trades in 4 digits (e.g. 1.3579 USD). Which means that one tick represents a value change of 6.25 USD. See here for more contract details: https://www.cmegroup.com/trading/fx/g10/british-pound.html How this compares to your forex trading may depend on the leverage which your forex broker gives you.
I don't trade these futures intraday so I don't know how tight the bid/ask spread usually is. You would have to take a look for yourself to get an impression.
Lesser leverage has one benefit: your account won't get a margin call as quickly.
The D1 time-frame isn't an issue - I set entry orders based on lower daily highs in an uptrend or higher daily lows in a downtrend and walk away.
The issue is the pain in remaining in a trend-following position with a very wide SL. Forex D1 trends are common but stutter twice a week. These days I am taking a small bite with a narrower stop-loss and an unambitious TP, and then getting back in again asap on recovery from the next weaker bar.