Which trade to enter when there's more than one opportunity at the same time?

Hi Trader,

Just wondering how you decide which trade to enter when there are several opportunities?

Do you check the correlation and pick the one with the strongest trend?

Do you use correlation at all to make sure not to trade two highly correlated pairs at the same time?

Why not take them all

Take the trade that seems more likely to make a profit. How to determine that, however, depends on a lot of factors.

I suggest you to focus on one forex pair, trading many pairs at the same time will not make good profit. You will never know which trade will make the most profitable trade (market is un-predictable)

mcsuperb posted:
Hi Trader,

Just wondering how you decide which trade to enter when there are several opportunities?

Do you check the correlation and pick the one with the strongest trend?

Do you use correlation at all to make sure not to trade two highly correlated pairs at the same time?

I would say follow your trading plan
If you dont have trading plan do not trade.
If you have trading plan it must clearly define when to enter trade and when dont.

And when you define when to enter trade, you can enter on couple pairs at the same time. No need to pick one, two or the strongest one :)

mcsuperb posted:
Hi Trader,

Just wondering how you decide which trade to enter when there are several opportunities?

Do you check the correlation and pick the one with the strongest trend?

Do you use correlation at all to make sure not to trade two highly correlated pairs at the same time?

sometimes finding the 'perfect opportunity' for each trade could be a frantic task and could lead to a point wherein we couldn't decide well. and that's where forex indicators come in, (see https://fto-capital.reviews/index.php/forex-indicators/), use these tools to gauge their landing and pick the better one.

one thing that's often overlooked is the volatility to bid-ask spread ratio. if i have x identical signals, i usually go with the one where i have to pay my broker the least for the same perceived risk.

Since we can't know which trades will be profitable, if the signals meet your trading system there is no reason to try and cherry pick. Doing so invalidates your strategy and makes your odds less than radom.

Trading correlated pairs can work but again this should be part of your strategy, if you take the time in evaluating pairs you will find that some correlated pairs move before the other correlated pair. This could be used as part of a strategy. However, many of these correlations have less volatility so the move is a fraction of the main correlated pair, as such use cautiously.

Assuming, your talking about trades that meet your strategy than there are 2 things to consider:

1) This is when using high leverage is beneficial by allowing you to take multiple trades and having the margin to cover them, Do Not leverage your positions, us the leverage to equalize your position sizing.

2) If you're trading a pair with a pip value of 1$ than size your position so all your trades have a value of or as close to 1$ as possible. This is important to insure a loss is made up with 'A' win, rather than a win and a half for example. Nothing worse than to have a 20 pip loss or 20$ loss and a 40 pip winner but the winner is worth .881 per pip so a profit of 35.24$ rather than 40$ or 39$ or 41$ depending how you position your size.

I think to many traders see leverage as a way to get rich rather than a way to go broke, however, using leverage in a beneficial manner makes a world of difference as well as reducing your overall drawdown by allowing you to equalize your position size.

Above all else follow your system this is the only way to truly evaluate your performance and that of your system.

If there at many opportunities, I take them all and then reduce my Lot size for each trade

I agree with NicoF1. Exactly what I was talking about 😄

I, personally, don't keep more than 3-4 positions open at a time, regardless of lot size. I start having a hard time following them all if I have more.

The answer is simple.If you are trading manually and you are 100% sure about the profitability of your system and there is a trade set up in each currency pair and you have a money management plan intact along with your trading system, then such a question doesn't arise. You have to enter every trade which meets the trade entry condition.

But again if you follow a thumb rule not to enter more than one trade at a time, then that depends on your past experience and backtesting which should tell you which trade to enter with maximum probability of success.

NicoF1 posted:
If there at many opportunities, I take them all and then reduce my Lot size for each trade

But where to set the limit? For me it does not seem rational to reduce down to minimal numbers. There has to be some max number depending on the size of the lot. Or what you think?

Mike76 posted:

NicoF1 posted:
If there at many opportunities, I take them all and then reduce my Lot size for each trade

But where to set the limit? For me it does not seem rational to reduce down to minimal numbers. There has to be some max number depending on the size of the lot. Or what you think?

This has to be defined in trading plan!

togr posted:

Mike76 posted:

NicoF1 posted:
If there at many opportunities, I take them all and then reduce my Lot size for each trade

But where to set the limit? For me it does not seem rational to reduce down to minimal numbers. There has to be some max number depending on the size of the lot. Or what you think?

This has to be defined in trading plan!

Sounds logical

Mike76 posted:

togr posted:

Mike76 posted:

NicoF1 posted:
If there at many opportunities, I take them all and then reduce my Lot size for each trade

But where to set the limit? For me it does not seem rational to reduce down to minimal numbers. There has to be some max number depending on the size of the lot. Or what you think?

This has to be defined in trading plan!

Sounds logical

There is no other way.
You cant just open trade based on your feelings. You need to execute your trading plan precisely to get consistent results.
Otherwise you wont succeed long term.

I have also read that the best traders focus a lot of their time to trading psychology. For not to make decisions by their feelings.

mcsuperb posted:
Hi Trader,

Just wondering how you decide which trade to enter when there are several opportunities?

Do you check the correlation and pick the one with the strongest trend?

Do you use correlation at all to make sure not to trade two highly correlated pairs at the same time?

If we are not so experts we can try the ADX since it is just one of those instruments that help us to filter the operations and to discard the ones that have the greatest risk. the ADX index goes down and then falls below the value 30. Therefore, there are no more trends, or at least we must realize that the trend no longer has such strength as to enter with a trade, if we are using a trend following technique. It's a matter of continuing to study and see what is best for us