Nov. 05, 2019
When you start your journey on Forex, you get overwhelmed with the amount of information coming your way. One your path to becoming a professional trader, you should master your skills in a single area at a time. Choose one strategy, one timeframe, one currency pair. It doesn’t mean that you will always trade the same instrument, but you should definitely choose one to become your favorite during your first steps.
Advantages of Having a Favorite Market
Especially if you are a beginner, you understand the less you need to learn and make from the start, the better. But let’s take a look at the main benefits you’ll gain:
1. Become a master much faster
2. Less to analyze
3 Avoid overtrading
4. Better risk management
Become a Master Much Faster
You have probably heard that to become a professional in any area you should spend 10,000 hours doing it. If you concentrate on monitoring one single pair, you will eventually become a specialist. You will learn the behavior of the instrument so well, that you will start making much better predictions than those who trade on 10 markets at the same time.
Less to Analyze
When preparing for a trading day or even a trading week, you should analyze the market first. You need to draw required levels, analyze the behavior of the price, and even make a list of the upcoming major news releases. If you had to do it for one market only your life will become much easier.
If you do it for several markets simultaneously, you are more likely to get confused and eventually lose money because of mistakes in your analysis. Sticking to one market you keep your head and your trading decisions clear.
Even if you are just a beginner, you have probably heard that overtrading is one of the major problems in the Forex. When you look at one chart only, you get less suitable trading setups and this way you avoid unnecessary trades.
But there is a tricky side here as well. You might seem that you don’t open enough trades and this might push you to open positions not included in your trading plan. That’s the worst thing you might do in this situation. Make sure to always follow your plan.
Better Risk Management
When you have a bunch of trades open on different trading instruments at the same time, it is much more difficult to control your risks. You need to process much more information simultaneously. You can easily get overwhelmed and your trading account might get over-leveraged. Try to focus on a single market and you’ll see how easier it will become to control your trading risks.
Don’t worry. Eventually, you will be able to trade on a few markets and even a few trading accounts simultaneously. But before you get there, start small. Try mastering only one market at least for a few months. You will gain confidence, become consistent and disciplined. And once you become a specialist in a single market you will be able to add more.