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Chapter 22, Part II. Crosses – Continuation of Discussion... Page 2

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 22, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Crosses are not similar among the crosses :)

    Although we call as a “cross” any currency pair that does not include USD, crosses themselves have some inner classification. For instance such crosses, that contains EUR or JPY are quite common nowadays and have nothing curious for traders. They have relatively solid liquidity, spreads and trading volumes, while other crosses are quite different from them.

    Pipruit: What are they?​

    Commander in Pips: This is really crosses of the crosses (he-he). Such pairs that do not even contain JPY and/or EUR. Can you imagine it?

    Pipruit: Well, at least theoretically, for instance GBP/CHF or AUD/NZD.​

    Commander in Pips: That’s right, but not only this. “Crosses of the crosses” also include some emerging market currencies or small countries currencies that are not very liquid. It could be NOK, DKK, SGD, HKD SEK, TRY and others. Just imagine HKD/TRY cross… Augggchh, habdabs I’ve got the creeps…

    Pipruit: Hm and what’s the problem?
    Commander in Pips: Nothing, just look at this mild AUD/NZD 4-hour chart. I suppose you really want to trade those spikes, don't you?


    Pipruit: Wow, and what we could do?​

    Commander in Pips: First – don’t trade it. Second, if you still want to trade them, be aware of:

    1. Spikes, that you won’t to by stopped out by – place stops farther out;

    2. Choppy and sloppy price action – this is the game that is called “try to make good trade”

    3. Lack of liquidity – small trading volumes

    4. Wide spreads due p.3, that you will have to pay for.

    5. Real doom and gloom during macro data releases.

    Pipruit: Why we should trade ‘em at all?​

    Commander in Pips: Nice question, son. Tell me, when you know the answer… Or, wait, I know. We can trade it if we want to have SEK or HKD more than anything else.

    Pipruit: That’s not funny…​

    Commander in Pips: Right, I can even say that it’s grimly.
    #1 Sive Morten, Dec 22, 2013
    Lasted edited by : Sep 30, 2016
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