It is better to focus on just one currency pair? Or as much as possible? These questions do not have a simple answer – it all depends on the individual trader. But there are certain principles that you can take into account, and that can help you feel more comfortable in this choice …
Watching one currency pair. For those new to trading, it is definitely the best choice. When you start to look at the charts, you can feel very uncomfortable, trying to control a large amount of information on many currency pairs.
It is a difficult task even for trading veterans. So, if you are just starting out with the Forex market, it is better to focus on one, two or three currency pairs. Thus, you get to know each currency pair is much better and faster.
However, here there is one small problem, which can make a big difference. What if you do not know how the market will behave in the chosen currency pair for a few days, weeks, months? If you force yourself to transact only on your selected pairs, this will not lead to anything good.
How many currency pairs you need to trade?
For example, many traders only look at the EURUSD. If not for this pair of signals over time? Why not trade on other pairs in which there is a clear signal to enter the market?
Watching multiple currency pairs. We are not talking about the simultaneous trading on multiple currency pairs. We’re talking about monitoring these pairs. So that you can determine which of these couples have a clear market conditions, which have a greater chance of moving up or down. As a result of this observation, you can concentrate on these currency pairs and discard those that are unstable or uncertain behavior.
This is exactly what many traders do at the beginning of each trading day – the analysis of long-term charts (daily, four-hour). And these decisions are made with this analysis:
– What currency pair should trade today;
– On which currency pairs should look for opportunities to short positions, and on what – the possibility for long;
– Possible support and resistance levels for each pair.
Thus, the idea is to trade currency pairs that have a clear market conditions, rather than those that you just decide to choose at the beginning of its development as a trader. The more experience you gain in the process of working on the market, the longer will be able to connect the tool to find the most suitable for trading at the moment …