How many currency pairs to trade?
Most people, especially beginners, associate trading with a frequently displayed picture of a trader looking at tables of asset prices, multiple charts, the flow of news and some kind of technical indicator(s). Sometimes a room full of traders are pictured. Such pictures suggest that there are moves and a lot of action that the trader should not miss and he or she should take opportunities quickly.
For most people, a chart with candles represent price movements. Some would even think that it is what price movement is about. Learn to use some technical indicators, follow up on the fundamentals, connect the dots and your are good to go. Well, that is very far from the truth.
Trading is reducing something complex to something simple, buy or sell. All done in time. People tend to keep looking, shifting their focus all the time, thinking they are smart enough to be involved in all kinds of things.
However, behind everything, there is a story. You may be hearing about the importance of powerful stories to build a compelling argument at your workplace when wanting management to listen to you (advice: just ignore or use them all – with few exceptions, they do not care about you – and follow your personal agenda only. Make sure you have one).
It seems the world is heading to a direction where it is not welcome for people to have a story on their own. Rather you are welcome to consume news, information and be part of events, making sure you do not connect the dots but understand small fractions of life only – could be intended but likely the result of ignorance. You can think about the world of price movements as such.
As a functional trader, you are encouraged to build a narrative for price movements, for the trading day and beyond. The narrative includes technical and non-technical elements. But here is a question. Think about an author or a reader of a book for a while. How many stories do you think an author thinks about when writing a book? Do you think it is possible for one to either read or create two stories/books the same time? I may be a linear thinker but I do believe that it is not possible. Not in the sense of full immersion into the story.
Let’s apply the learning to currency trading. A currency pair has a story and a trader should fully understand it before taking a position in time and at a chart location. However, building a narrative based on technical and non-technical elements is not an easy task. Keeping that narrative in mind when price moves is another challenge for most traders. When you consider yourself a trader, you are actually trading a narrative but that narrative is not written by you, you can only construct it on the go. Ask yourself how many narratives can you build on the go? How many of your daily chores you deal with the same time? The answer should be obvious. You can complete tasks one by one. You can trade pairs, if you want, one by one. But you can not trade more than one pair with your full attention on all. It is because you can not build and keep more than one narrative in your mind the same time. Do yourself a favor and learn to focus on a single pair. Let all the things go such as social trading, forums and groups, looking at what others trade or do, stop looking at things other than the price movements of the pair you have selected for trading.
As a functional trader, you learn to trade a single pair. Once you master to trade that pair in all circumstances, you may decide to trade more than a single pair but by that time you will have a complete understanding of everything there is to know about the movements of price. It will not take you further regarding your ultimate aim – to make money – just give some salt to the boring trading days.
Trade well
