Trading Longs and Shorts on 1 Currency Pair: Bad or Good?

2 min read

I myself do NOT enter into hedged trades. That is valid for trades that are both up in profits and down in losses. Basically I prefer to handle 1 trade at a time, either by staying in or exiting.

My lack of hedging, however, does not automatically mean that I only look for setups in 1 direction. Some charts offer multiple opportunities to both sides.  And I could potentially be interested in trading both setups depending on how the circumstances unfold.

The trend is important and many traders only want to trade with it. And I understand that logic. It enforces discipline, which is a very important element of successful trading.

But the trend is flexible and fluid. Plus the trend has multi facets and can change strongly from time frame to time frame.

Although I focus on trading with the trend, I am also on the lookout for key support and resistance that could stop and change the momentum. Being alert to these kinds of changes helps us filter out bad setups. And it also gives us the opportunity to see fresh and new setups.

audusd(5)

An example of this flexibility in my approach was done last week. Here I was primarily looking for shorts on the AUDUSD despite the lack of a trend. The great thing is that both short and long setups closed for profits:

  • The short setup indeed went for a precision hit and closed for +60 pips.
  • The long setup closed for anything between +25 and +75 pips (depending on the trail.

I don’t recommend this for beginning or even newly intermediate traders.

But it is clear that in some cases 1 currency pair provides 2 interesting opportunities if you have the skill and mind set to manage them successfully.

Many green pips, Tarantula FX

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