Trader Dale Volume Profile

What instruments to trade?
So, my advice is this: don’t trade too many instruments/currencies
with high correlation. If you do, make sure you have rules that
prevent you from taking on too much risk. For example, don’t open
more than two USD positions. This is an extremely simple trade
management rule, but it’s massively powerful. You can also halve
your positions if you see that you are going to enter a trade on two
heavily correlated instruments. Remember that you need to feel
comfortable with losses as this cannot be avoided from time to
time. What we don’t want though, is a single macroeconomic news
event to hit us for 3-4 losing trades at once because we forgot they
were all heavily correlated.
Make sure to
have rules to
prevent you from
taking on too
much risk.
Being overwhelmed
Another problem that comes with trading too many currency pairs or other trading instruments
is that it’s just really complicated to handle all the trades. If you want to be successful in trading,
then the execution of your strategy needs to be basically flawless. You need to focus and
follow the rules of your trading strategy 100%. Everything needs to be perfect – analysis, entry,
exit, position management, money management. Apart from that, you also need to know which
macroeconomic news will impact the instrument/s you are trading and how large the impact will
likely be. All that is doable if you focus on only a few trading instruments, but it is much harder
when you trade 10+ of them on the intraday basis.
Choosing the right currency pair
At first, you need to consider the costs of trading. These consist of spread, broker commission,
and swap. Generally speaking, the bigger the Market Share percentage, the lower the trading
costs. Here are the most liquid currency pairs (pairs with the biggest Market Share):
89