How Many Currency Pairs Should You Trade?
This is a question that may plague a lot of traders. Some of you might have heard things like “trade all of them” or “trade one until you master it”. These opinions can come from leaders in the trading industry thus leaving some newbies or even intermediate traders in the grey about which route to take. Which answer is the right one? Both…
How many pairs you trade is completely up to you. There are something like 28 mainstream currency pairs to choose from and to be honest I don’t trade all of them, but the reason why I don’t will shine some light on whether you should or shouldn’t, yes you can choose.
I do not trade all the currency pairs! Why? I DON’T NEED TO. My trading style is more day trading with a splash of swing trading and I promise you, trying to keep up with ALL the currency pairs on smaller timeframes the WHOLE day for 5 days a week will cause you to lose some neurons and come Friday you will be the most drained and exhausted human being on the earth (that is if you’re not in a stress-induced coma).
I get a plethora of opportunities on 4 or 5 pairs for the week to satisfy my trading bug and work my edge, that’s because I trade on smaller timeframes. If you also trade on smaller timeframes (day traders or scalpers) I don’t advise trading every single pair because price moves too much to keep track of all of them.
The smaller timeframes are a different beast compared to daily charts and weekly charts, but there is more than enough action on to give you a large enough sample size to work your edge with. Speaking of action there’s more clarity and more flexibility with larger timeframes so if you can’t spend the better part of your day keeping track of the market, the larger timeframes are your best bet
Deeper dive into timeframes
It’s all about Timeframes. Large Timeframes specifically are less noisy. Anyone that has seen a 15-minute chart next to a Daily chart can clearly tell that one looks like a maze and other like an open field.
If you trade larger timeframes that’s completely fine but understand that the price moves slower than on the smaller timeframes. Why? It’s the same chart sure, but a DAILY candle captures way more data than a 15-minute candle does so a candle prints only at the end of the day. That can mean A LOT of waiting.
This is all good and well if you have a job or side hustle to fill all that waiting with but if you have time on your hands, you might find yourself banging your head against the keyboard. Unless… You look for action somewhere else.
This is where trading multiple pairs comes in. Add different pairs that you can look for opportunity on and pretty soon you’ll find yourself getting a good trading sample size. Now, instead of placing a trade once a month you might place a trade every week.
Like everything else in trading, you’ve got to find your sweet spot. Maybe you’re an H4 or H1 guy. Add or remove pairs to accommodate YOUR NEEDS and not because some Instagram, Twitter or YouTube trader told you to trade a certain number of pairs.
To Sum It Up
No, you’re not an idiot for trading more or less pairs. Truth is the choice is yours and it depends on the type of trader you are. There a lot of people in the Forex world that will make it seem like their way is the only way to do things but really, as you can see, this thing is all about learning what works for you and what doesn’t and the sad truth is most people don’t stick around to find out.
It is a grueling process and you might get frustrated or bang this and that or maybe even cry, believe me, it’s normal. Nothing will expose your true self like learning how to trade will. This thing will change you, but with practice and patience, it will be for the better and then for the richer (If that makes any sense, you get my point).
Trading smaller timeframes doesn’t mean you will be swiping left 27 times, there’s enough action for everybody. Trading higher timeframes doesn’t mean you will get left behind, add some pairs to your trading arsenal and tweak your trade frequency until it’s just right.
On a side note: I think it’s pretty cool that there’s a way to earn a living out there that allows you to build your schedule. Just a little self-thought, I’ll see you guys in the next one, until then…
Don’t bet the farm.
Don’t lose your shirt.
Cut the L.
Keep the W.