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Know How Many Markets Should You Trade

Time after time, I get notification from merchants who demand that they “practice” in a solitary market. Despite the fact that they may feel a feeling of solace and even authority by exchanging only in one market, this sort of approach is a genuine misstep. As informal investors, we are occupied with beneficial markets. Yet, what characterizes a productive market has nothing to do with the sort of market it is; somewhat, it relies on upon how it is drifting. Subsequently, a fruitful merchant ought to confer him or herself to exchanging inclining markets, regardless of what they are.

By constraining yourself to just a single market, you restrict your odds to benefit. There are times when a market is drifting and simple to exchange, yet there are times when markets are recently moving sideways. The more markets you watch, the more open doors you get the chance to find a pattern every single day. As I jump at the chance to state, “Discovering great exchanges implies de-choosing the terrible exchanges,” however you can just avoid awful exchanges by having various wellsprings of good exchanges.

You can see the problem with only trading a single market with the following analogy. Let’s say that you want some ice cream. You walk to the corner store and ask the lady behind the counter, “Do you have ice cream?” The lady responds, “Sure. What do you want: strawberry or vanilla ice cream?” Actually, you were looking for chocolate ice cream, but since you only have these two flavors to choose from, you compromise and pick the vanilla ice cream. That’s not exactly what you were looking for, but it’s close enough. After all, it’s ice cream and you don’t walk away empty handed.

Now think about the following scenario: You are in the mood for ice cream and walk into a Baskin Robbins. You say “I want ice cream” and the man behind the counter smiles and says: “Of course! What flavor do you want?” You respond: “Chocolate” and he asks you “Dark Chocolate, White Chocolate, Belgium Chocolate, Milk Chocolate or Truffle Chocolate?” Now you have choices and you will get exactly what you want.

When you are trading only one market, you have limited choices and you will be forced to compromise. After all, you don’t want to walk away “empty handed,” and you might take a trade that only partially fits your trading plan. You will constantly be forced to settle for a less than an ideal trade because you’ve limited your options by looking at only a fraction of the available markets. Trading only one market means that you implicitly accept the limitations of that market, allowing it to set your possibilities rather than looking around for the best opportunities available for profit.

Once seen in this light, it should be obvious why trading only one market is never an advantageous strategy. Trading multiple markets is like walking into a Baskin Robbins if you want ice cream. You have many choices and can pick the market that fits your own personal style and trading goals. You will only take the best trades, and, therefore, increase your chances of making money with day trading.