Why Do You Look At The Currencies Pairs You Look At?
Often times I am asked what currencies I look at and why? Then I am asked to give guidance on what currency pairs the trader themselves should look at.
My go to question before giving the answer it this- What pairs do you like and what is your personality, in which I break down in detail certain currency pair movements and their personalities.
For example, if you are patient and don't mind slow money, I may suggest an Australian base pair or even a New Zealand pair. If you like fast and violatile pairs, I may suggest GBPUSD or GBPNZD. Of course a lot more goes into the conversation, but this is the quicker side of the conversation.
See, when I create my watchlist, its all about setups. A trading setup consists of 3-4 rules that your trade on a regular basis that produces you a profitable outcome a high percentage of the time. I have at least 3-5 setups that I trade on a regular basis.
My main setup is a break of the trend line and retest, taking profit at the previous low or high.
My rules are to:
1. Wait for a break of the trend line
2.Await a retest of the broken structure
3. Look for an entry per the daily time frame
4. Take profit at previous high or low depending on trend
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If a pair is setting up to give me this potential entry, it will go on my watchlist for the week and I will look to execute based on the rules I just mentioned above. Once I find that it meets, I color code it. Trading view allows me to color code pairs by clicking the flag next to it and picking a specific color.
If a pair does not fit that setup, I won't look at it for the week, because that will create a bad habit such as me mindless looking at a chart with no entry causing me to take my eyes off of the best pair for the week.
Trust me, it is easy to miss good trade setups by focusing on a currency pair that does not meet your rules.
All I'm saying is this, focus on pairs that meet your trading criteria. If they does not meet, don't add it to your watchlist. If they meet, put it on your watchlist and be patient to let the trade come to you since.
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Learn How To Setup Your Forex Watchlist On Youtube by clicking the video below: