I want to just talk for a moment about why I didn’t have the AUD/CAD and the USD/CHF on my radar for the recent set ups found by Shandy and Spyderman. I use a criteria which is this,
Is the spread reasonable (4 pips maximum)?
Is the daily range good? it needs to be over 100 pips and ideally more..
Are the back tested results of this particular pair for the past year profitable?
Some pairs are very spiky or very compressed in their movements and are not reliable for these type of trades, we use small stops so we want reliable well-behaved pairs.
What is the weekly and monthly situation? is it ranging, compressed or moving fast?
What is the time of day when this pair is most active and am I available at those times?
for example the JPY and the AUD pairs often move during the Asian whereas the USD/CAD tends to move in New York time.
If a pair is in the momentum phase on the longer term charts and it follows these criteria then it is a good bet for looking for 10XROI and TAYJ trades.
For example for some reason EUR/USD back tested the best for 2012 for the 10XROI trades followed by EUR/JPY, AUD/JPY and EUR/AUD.
If a pair has a very small daily range but otherwise is suitable then don’t go for a 10XROI trade, maybe, go for a 1-5ROI instead.
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