Hi
I just want to gauge general opinion on the following -
i have a fully automated trend-following mechanical trading strategy that i trade on GBPUSD at the moment on 60 minute charts.
You hear about spreading risk within a trading portfolio/trading plan. This may include trading more than one instrument.
My approach suits GBPUSD best. Therefore i am thinking about 'spreading the risk' and incresing profits, by trading essentially the same strategy (probably with a different maximum stop-loss size) on a 2nd GBPUSD timeframe such as 90/120/180 minute charts.
Do you agree that trading the same instrument, with the same strategy, but on a different timeframe is a valid way of spreading risk?
(I happen to think it is, because the two timeframes will not always be trading in the same direction at the same time, because it will take longer, and a bigger pip movement for the longer timeframe to generate a reverse signal. Thus the longer timeframe will often miss parts of a move, but will also avoid loss-making reversals/entries.)
If you do agree, do you think trading the same instrument & strategy on 2 different timeframes at the same time, is as valid a way as spreading risk as trading the same strategy on two seperate instruments?
Also, do you do this in your own trading (one strategy, traded on two separate timeframes on one instrument)?
Obviously to trade a strategy on 2 timeframes on the same instrument, at the same time, would require 2 seperate accounts, because few brokers allow you to be long & short in the same instrument at the same time.
Thanks a lot.
I just want to gauge general opinion on the following -
i have a fully automated trend-following mechanical trading strategy that i trade on GBPUSD at the moment on 60 minute charts.
You hear about spreading risk within a trading portfolio/trading plan. This may include trading more than one instrument.
My approach suits GBPUSD best. Therefore i am thinking about 'spreading the risk' and incresing profits, by trading essentially the same strategy (probably with a different maximum stop-loss size) on a 2nd GBPUSD timeframe such as 90/120/180 minute charts.
Do you agree that trading the same instrument, with the same strategy, but on a different timeframe is a valid way of spreading risk?
(I happen to think it is, because the two timeframes will not always be trading in the same direction at the same time, because it will take longer, and a bigger pip movement for the longer timeframe to generate a reverse signal. Thus the longer timeframe will often miss parts of a move, but will also avoid loss-making reversals/entries.)
If you do agree, do you think trading the same instrument & strategy on 2 different timeframes at the same time, is as valid a way as spreading risk as trading the same strategy on two seperate instruments?
Also, do you do this in your own trading (one strategy, traded on two separate timeframes on one instrument)?
Obviously to trade a strategy on 2 timeframes on the same instrument, at the same time, would require 2 seperate accounts, because few brokers allow you to be long & short in the same instrument at the same time.
Thanks a lot.