How Many Currency Pairs Should You Trade? (Podcast Episode 4) - YouTube

this is the Forex Q&A podcast this is VP professional Forex prop trader and

creator of nononsenseforex.com -- Mission Control for all things Forex a

great blog all the videos that end up on my youtube channel

this here podcast and a place called ask VP where if you click on that tab you

can ask me any forex trading related question that you want to ask and I will

answer you very quickly and often at times it's gonna make an episode of this show

and what I've done so far is take the more basic Forex questions and answer

those first because I don't really know who out there is listening do I have

mostly beginning traders do I have mostly people who haven't even traded

Forex yet and just want to or do I have people who have put five ten fifteen

years in and are just yearning to learn more or trying to make their trading

better I don't know you so I figure the best thing I can do is start with the

basics but regardless of how long you've been trading you're gonna want to hear

my answer to these questions because even if they seem basic to you I come at

things from such a completely different angle that an answer I give to even the

most basic questions might just be integral in changing your forex trading

around forever at least that's what I'm trying to

accomplish now when I say no-nonsense Forex I mean it the site itself is very

basic very clean very easy to navigate no ads just kind of a one-stop shop for

blog video podcast everything and that's on purpose every other Forex site you go

to has some measure of crap on it that you don't want to click on that you

don't want to see that you don't want to deal with hell even this podcast has no

advertisers it doesn't even have music I don't have an intro or an outro it's

just me in front of a microphone transmitting the best forex advice

possible straight into your headphones and here in episode 4 this question I

think is very important for all of you listening no matter how long you've been

trading because I will bet you don't trade like I do when it comes to my

answer to this question and I'm not so arrogant to sit here and say that you

should trade exactly like I do but I do trade professionally and I do trade for

only 10-15 minutes a day and then I get to live my life after that

that's pretty good I mean can we agree that doesn't suck? and if you want to get

closer to that I am going to show you how and as always when I answer a

question I'm gonna really state my case and give points to back up why I feel

this way and by doing that if I can get you further away from your old way of

trading that isn't very successful and into a much better and easier way of

trading then I've done my job so let's go ahead and get into the question this

question is from Tariq from New York City he asks how many currency pairs

should I trade and that was it very short question now guys I'm gonna tell

you my answer and it's gonna seem a little crazy but don't stop the podcast

finish this out and let me explain why I say what I say and I think you're gonna

like my answer at the end even though it's gonna seem a little bit unusual at

first when Tariq asks how many currency pairs should I trade my answer is 27

because that's how many currency pairs I trade in forex now I also trade metals

that's another conversation for another day but when it comes to actual spot

forex trading 27 pairs is your magic number and I'll tell you how I got there

but first I want to explain to the brand newbies what I mean by currency pairs

and how I got to 27 and for those of you who trade a lot less than 27 maybe just

one or two or three or four I want to tell you also and explain to you why

that is a gigantic mistake and how the mentality behind why people would only

trade so few currency pairs is just downright silly and really makes no

sense at all so first things first as far as the currency pairs that I trade I

take the 8 major currencies for some reason you don't know what those are

it's the Euro the pound the United States dollar the Aussie dollar the New

Zealand dollar the Canadian dollar the Swiss franc and the Japanese yen now if

you take every combination of those 8 major currency pairs and minus 1 you end

up with 27 now I do not trade your more exotic pairs you're crazy currencies out

there like the Mexican peso Turkish lira South African Rand things like that and

that's another conversation for another time again

I want to keep this podcast relatively short but those 27 give me the best

chance of winning and that's what I suggest you trade as well so I trade the

daily chart and I trade it almost exclusively and if you don't understand

why or don't know why go back to episode 3 and explain exactly why I do it and

why you should - I feel very strongly about trading the daily chart only and I

make a really good case for it so if you haven't checked that episode out please

do after you're done with this one and let's be honest if you're gonna trade 27

different currency pairs on a 15-minute chart you would lose your mind so what I

do is I take my little algorithm my little system I put together with my

tools and indicators and at 2 p.m. Pacific Standard Time I take a look at

all 27 of my currency pairs and I see if any of them tell me to do anything

whether it's make a trade maintain a trade I'm already in or do nothing and

move on to the next one and what's really good about having 27 of them

there is there's a chance a really good chance that I'm gonna do something on

any given day it really takes away a lot of that dead time that can happen when

you trade that daily chart because I'm getting 27 different chances for my

charts to tell me to make a move and this turns out to be really great I'm

usually never in more than three or four trades at one time it's very easy to

manage and you know I'm almost always in the market doing something but a lot of

you don't do that and I want to go over the reasons I hear the most of why

somebody only trades a few different currency pairs or sometimes only one

currency pair which I totally don't get so I will run into people who no

bullshit say I only trade the euro dollar and I say okay why

get answers like well it's the most liquid pair it's the one I want to trade

or I will get the answer and I really hate this one I just want to get good at

one currency pair before I move on to a different one so let's attack both of

those one by one first off the euro dollar is the most liquid pair yes I did

an entire video if you guys haven't seen this please go watch it it's on my

youtube channel I think it's on the site right now - why the euro dollar really

isn't a great pair to trade especially if you're new I do trade it but I'm a

professional who's been doing this a long time, I don't trade it nearly as often as I do a lot of pairs but for

somebody who's brand-new it has so much working against you you need to know

what that is and you need to move on to something different if you really insist

on only trading one pair don't make it the euro dollar that's the last pair you

should be in really any dollar pair and if you want to know more I'll link that

video down below for you but the people who only trade a few different currency

pairs only trade one because they they want to get really good at those before

moving on to other ones that is complete nonsense

when it comes to a daily chart over time they all pretty much move really close

to the same way people say things like well the the pound dollar likes to stay

in a range or the Aussie yen likes to trend yeah it's doing that right now

that doesn't mean it's going to do that into the future and the future is what

we are going to be trading to sit there and say the pound dollar does this and

the Aussie yen does this is ridiculous it's doing that right now check your

history go back does it always move like that

no it trends it falls into a range it consolidates it goes crazy it does

nothing for an extended period of time just like every other currency pair out

there you just don't know when that time is going to be if you sit there and say

the pound dollar is range-bound the one time it stops being in a range you're

going to get killed get that stupid mentality out of your head if I were

take the daily chart and take a random currency pair and

erase all the numbers and erase all the dates and set it at one given point in

time in the last I don't know three years and let's say I showed you kind of

a six months man but I didn't tell you when that span was and I were to just

show you the price action and I say okay what currency pair is this you would

have no idea I would have no idea nobody would currency pairs do not have

their own unique movement at least not on the daily chart which is really where

you want to be in the first place I will say it again currency pairs do not have

their own unique movement stop acting like they do do not be afraid of the

Swissy yen because you don't know anything about it or it's not super

liquid like the euro dollar is chart wise it moves the same as everything

else does just at different times of the year oh and some people also say well I

do really well on the dollar yen you have a lot of success there you have a

lot of success there now because it is moving in a way that really supports the

way you like to trade let me tell you in ten years of doing this all of that is

going to change you just don't know when and maybe the biggest reason why you

need to be trading many more currency pairs than you currently are is that

you're severely limiting yourself by only trading two three four pairs if you

have a really good system in place and I have a really good system in place but

you're only trading three pairs and I'm trading 27 I'm going to make a lot more

money than you are if you're trading three pairs and I'm trading 27 I have

nine times the opportunity that you have if you're only trading two or three

pairs you know who you are and we all know this girl you know that girl who's

really pretty but she's like 6 feet 3 inches tall and she only dates guys that

are taller than she is and then she wonders why she can't find a good guy

you are that girl sitting there wondering why all your relationships

fall apart but you're limiting yourself to only 2% of the entire population cut

the bullshit do better why wouldn't you open up your trading horizons take the

little algorithm little system that you put together for

yourself on a technical level duplicate that on 27 different currency pairs on

the daily chart and you're always going to have some kind of skin in the game

this is how you create the best chance of making the most money possible in the

market over time if I can somehow convince you to exclusively trade the

daily chart and to trade 27 different currency pairs all combinations of the

eight majors then you are a lot further ahead than many people let me tell you

many people who have put five ten fifteen years into this game already

because so many of those people have already developed the worst habits

they're so inside their head with their 15-minute chart and their four currency

pairs they like to trade because at some point in time they had success with it

and they can't get that success out of their head you as a newer trader get to

start out way ahead of these people the experienced traders the ones who have

put years into trading are the ones I'm gonna have to convince the hardest and a

lot of them are just gonna keep doing what they're doing and not listen to me

if you're a newer trader please start off the right way it is gonna put

you so much further ahead then not just people who are starting out with you but

people who've been doing this a very long time and you have a free podcast to

thank for that now I almost forgot this there is one currency pair one

combination of the eight majors that I do not trade which one is it

it is the Euro Swissy I am a trend trader the Euro Swissy at least now has

been tied together for such a long time that it doesn't really trend in such a

way to where it trips my algorithm and I can actually make money off it it's just

not worth my time and that's okay trading 27 instead of 28 is just fine

with me the euro Swissy is nothing but a headache it's more fundamentals

driven than anything which is really the last place you want to be and I am 100%

okay just completely eliminating it from my trading but the euro Swiss see I have

no time for so there it is to recap all of the episodes up until this one go to

baby pips comm slash school to learn how to trade Forex but make sure you listen

to episode number 2 where I tell you which parts you need to pay attention to

and which parts you don't trade the daily chart exclusively if at all

possible if you need convincing you're for need reasons why that's where

episode 3 comes into play and to really set up your best chances of winning

after that trade every pair every combination of the 8 major currencies

minus the euro Swissy and if you can just get this far let me tell you you

are well on your way to exactly where you've always wanted to be in forex

trading and if you're really serious about taking your trading further go to

the No Nonsense Forex YouTube channel it's all free there's videos there to

cover some of the most important forex topics that for some reason nobody has

ever been told before I'm blown away by how many people email me and say I have

never heard this discussed anywhere and I've never heard it explained the way

you explain it like I said I'm gonna link that euro dollar video below also check out

the big banks video check out the number one strategy video I mean this site the

YouTube channel the podcast is still brand new I barely have any content out

but even the content that's out there right now is really really great

I put my best foot forward put some of my best content out early so you guys

can get everything set up right and really get into that winning mindset

before we start getting more technical and drilled deeper into some of these

things so thank you for listening new podcasts out every Monday starts your

week right get yourself set up right go attack those markets make that money and

start setting yourself up to win and really dominate this market and I will

see you in episode 5 go get it