Which currency are you trading? - EUR/USD/AUD/JPY?

[nattybumppo]

eurjpy vs eurusd, usually has positive correlation, although not always

Well, sure there is usually a positive correlation between these 2 pairs that each include the euro because the euro is correlated perfectly with itself. For example, if the euro is rising against the yen and falling against the dollar (that is, the correlation has gone inverse), then the dollar must be rising against the yen even faster than the euro is--in which case, you are better off to trade USDJPY rather than EURJPY. But since the USD will not always be rising against the JPY as fast or faster than the euro, in fact not always rising against the JPY at all, there will on average be a positive correlation between these two pairs (or any two pairs) that each include the euro.

 

[nattybumppo]

Why would that be? Although you’re right, I have never seen anyone trade the pound with this Asian currency. Am I right?

It is fairly likely, or at least very possible, that I traded this pair during 2020 when I was experimenting with different things in the FX markets, but I don't currently use it for intraday trades. I stumbled across a website that listed the most traded currency pairs of 2019 and GBPJPY accounted for 4% of all trades. The top 3 were EURUSD at 13%, GBPUSD also 13%, and USDJPY at 11%. Number 4 was AUDUSD at only 6%. However, I have had good luck trading the USDCAD intraday and it was only 5%. I was surprised that the EURGBP was only 3% even though the UK was still part of the EU then.

 

[nattybumppo]

You’re right @Williamharvard! Profitable too! Between 1 and 5 is my favourite time for trading yellow metal.

You guys need to specify which time zones you are talking about, or else use GMT.

 

[nattybumppo]

NZD has been in the talks for a while now. It’s the second highest it’s been, trading at just a few pips below 0.7317. Could be something to consider!

Analysts think NZD is likely to lose some ground since it has run up more strongly than the AUD or CAD, currencies that tend to perform similarly. NZD probably outperformed because of their outstanding success at controlling the pandemic with the use of very strict quarantines ("lockdowns"). Currencies have tended to react on news of the pandemic worsening or lessening within the issuing country. However, the vaccine means other countries should be getting it under control as the year progresses, reducing New Zealand's advantage.

 

[nattybumppo]

I currently trade with EURUSD the results are good but looking for another alternate currency pair with London timing any recommendations?

Any pair trades well (about as well as it is going to trade) during the London session. London is the "king" of the currency trading markets. NYC is no. 2. Tokyo is a relatively distant 3rd. I would rather trade JPY during the London session than during the Tokyo session.

 

[radex78]

Well, sure there is usually a positive correlation between these 2 pairs that each include the euro because the euro is correlated perfectly with itself. For example, if the euro is rising against the yen and falling against the dollar (that is, the correlation has gone inverse), then the dollar must be rising against the yen even faster than the euro is--in which case, you are better off to trade USDJPY rather than EURJPY. But since the USD will not always be rising against the JPY as fast or faster than the euro, in fact not always rising against the JPY at all, there will on average be a positive correlation between these two pairs (or any two pairs) that each include the euro.

Thank you for the idea, trading based correlation interesting to more depth learning and practice, maybe the main difficulties are how to measure which currency move faster so will get anomaly movement in a positive result.

 

[Evrardmakon]

I am of the view that limiting yourself to a few currency pairs is a negative factor. Only in the beginning it’s better to focus on 1 or 2 pairs but eventually one got to expand what they trade in.

I second you here. Focusing on just one or two pairs suits day traders using 5 minutes charts but trading in the higher time frames will simply make things harder than they need to be.

 

[cortney302]

I second you here. Focusing on just one or two pairs suits day traders using 5 minutes charts but trading in the higher time frames will simply make things harder than they need to be.

So, what currency pairs would you avoid if you were a beginner?

 

[shriekpurser]

Yes, a big plus for intraday. The wider spreads are okay for longer holding periods, but for intraday trades for a few pips, those tight spreads let me enter at the market. If I have to enter with a limit order, sometimes the price gets away from me without touching the limit. Then if I give up on the limit order and chase it, the move is mostly over and I get whipsawed after getting in too close to the end. That's why I want tight spreads for intraday.

Do you combine intraday with other strategies?

 

[shriekpurser]

It is fairly likely, or at least very possible, that I traded this pair during 2020 when I was experimenting with different things in the FX markets, but I don't currently use it for intraday trades. I stumbled across a website that listed the most traded currency pairs of 2019 and GBPJPY accounted for 4% of all trades. The top 3 were EURUSD at 13%, GBPUSD also 13%, and USDJPY at 11%. Number 4 was AUDUSD at only 6%. However, I have had good luck trading the USDCAD intraday and it was only 5%. I was surprised that the EURGBP was only 3% even though the UK was still part of the EU then.

I must say I am surprised with the figures, especially of eurgbp