Simply a few points that I have not discussed.
First up is 'threat' and 'connection'. I have actually talked about risk per trade where I suggest no more than 2-3 % per trade. Again, it depends on the specific trader on much they risk. One thing I have to explain though, is the problem with relationship. This just indicates that two pairs may trade generally in either the very same direction at most times or in the contrary direction most times.
The most obvious and highly correlated pairs are the EUR/USD and the USD/CHF as they generally move rather well contrary to each other under normal scenarios. So if you had gotten the EUR/USD on one trade and sold the USD/CHF on another trade, risking 2 % on each trade, in reality you are really risking 4 % because of the high connection.
The EUR/JPY and GBP/JPY likewise can move pretty much in the same direction for a lot of the time. When you think about it, if the pairs have a common currency involved, and news comes out that impacts that currency in a big way, then it does not really matter what involvement the other currency has, as the market will move.
It is simply something you will need to be aware of when it comes to complete risk on your trades. Best means to look into how various pairs relocate relation to each other, is just throw up the 1hr charts of all the pairs you are interested in trading on the one display and see exactly how they move over a few days, specifically when information is released.
I also spoke about prepared 'news releases' that could or could stagnate the markets. Today as an example, as I am just trading the EUR/USD and I am just concerned about possible high effect kind information, I have actually inspected the Forex factory calendar and now know that I have to be on my toes at 7pm my time for news from Germany, and particularly alert at 10.30 pm my time for 3 significant items of news from the United States. Hopefully my trading will be completed by 10.30 pm, so it will not be a problem.
Now there is occasionally the case of unplanned news that could influence the Forex rates. Examples of this consist of terrorist attacks on United States soil (Sept 11), capture of an extremely sought after individual (Sadam) or even some thick Treasurey official making an out of the blue comment throughout what ought to have been a dull and predictable speech. Lots of things can move the marketplace when you least anticipate it and it does take place on a regular basis!
I have actually been sitting at my computer system, rather aware of all information coming out, when all of a sudden a pair could just skyrocket 50-100 pips in a minute or more. Gets the heart pumping as you quickly examine all the news releases to see exactly what has actually triggered the blip. It could be something basic like a report of a planned attack in main London. It doesn't matter if it is false, as the market will ultimately fix itself.
Just be aware that news can come out unanticipated and move the market, where I return to my previous point of making certain you have some sort of physical stop in place at all times.