In today forex faq, we have a fellow trader from Australia with the following question.
One quick question im in brisbane australia, I really feel the currencies to look at for movement and money and time efficiency are the euro/usd, gbp/usd im sumizing all other pairs are far less significant. They always say trade one pair and I feel given the London open and the gpb/usd should be the one I try to make money with, would you agree? Also what would your choice be? And also which time frame chart when it comes time for you to trade do you use?
I must say that it is right to stick with one to at most 3 currency pairs as there are simply too many pairs to trade with and it will disperse your focus. For me, I only trade the GBPJPY, GBPUSD and EURUSD and being focus will eventually gives you a feel of the currency pairs you are trading. If you have been trading a particular pair for sometime, you will find that you have a sense that the market is going to turn or going to break through a support or resistance.
As for London Open, I personally trade the GBPUSD and GBPJPY at that time as it is more volatile at that time of the day which will eventually translate into larger profit if you are right in your trade. As for EURUSD, I like to trade it during the New York Open session as it is more active at that timing.
As for the time frame to trade, it all depends on your trading style. If you are a long term trader who leaves your position open for a few days or even weeks, you should use the higher time frame like the 4 hour and daily chart. If you are a day trader like me, you will use time frame like the 15 minutes and hourly chart.
My personal suggestion to you is to trade with one pair at a time and slowly get to have a feel of the currency pair you are trading. Once you have a feel of the market you are trading, you can start to try out another currency pair. I understand that some of you are eager for action and may think that one currency pair only can give you limited number of trades per month.
However it is only through this specialization that you will have a feel of the market which can gives you an edge over the market. I hope that I have answered your question and if anyone of you has anything to share, do feel free to give your comment below.