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 even think that it is what price movements are 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 about reducing something complex to something simple, buy or sell, then close. 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 kind 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 (99% BS). Strangely though, 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 weird events, making sure you do not connect the dots but understand small fractions of life only – could be intended or the result of ignorance or both.

You can think about price movements in terms of stories and narratives. As a functional trader, you are encouraged to build a narrative for price movements, for the trading day and beyond. Such narratives include technical and non-technical elements. But here is a question. Think about an author or a reader of a book. Do you think it is possible for one to either read or create two stories/narratives the same time? I may be a linear thinker but I consider it not possible. Not in the sense of full immersion in the story.

A currency pair has a story and a narrative that traders should fully understand before taking a position. Building a narrative based on technical and non-technical elements is not an easy task and keeping that narrative in mind, being able to update it when price keeps moving, is another challenge for most traders. Consider that when you are trading a narrative, the underlying story is not written by you, you can only construct it on the go. Again, ask yourself how many narratives can you build on the go? The answer should be obvious. You can build narratives and trade currency pairs one by one. You can only trade one pair with your full attention on it.

For your own benefit, 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 your trading. Your objective should be to become one with price and the forces that drive it, have patience and go for the big fish, do not chase everything that moves.

As a functional trader, you learn to trade a single pair. Once you master trading 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. Trading more than one pair will not take you further regarding your financial goals, only give salt to the boring trading days. A bit of flavor, that is what trading multiple pairs should mean to you.