Many “Doors” on Forex Trading, Tap All!
In the past, before “plunging myself” into the world of forex trading, I was once registered as a household electronics salesman. The goods being marketed are household appliances such as vacuum cleaners, washing machines, blenders and so on. The job of the salesman is to offer these products to homes, door to door.
One of the “tips” that I remember very much was, “Don’t knock on one door for too long, there are still many other doors waiting to be knocked.” That is, if you don’t succeed in getting customers in one house, immediately move to another house because there might be instead there is a housewife whose husband just got a bonus from his boss and is thinking of buying the latest vacuum cleaner .
In the world of forex trading , we do not need to be tired of offering vacuum cleaners or washing machines from house to house. However, the wise advice in the salesman world can be applied as well. How to?
The Market Saves Many Opportunities
In forex alone you can find at least 17 currency pairs ; in commodities there are gold (XAU / USD), silver (XAG / USD) and crude oil (CLSC); Stock indexes are Nikkei, Hang Seng, Kospi, Dow Jones, S & P 500, Nasdaq, FTSE and DAX. Not to mention the stock CFDs from the United States, Hong Kong and Tokyo, totaling 183 selected shares.
Indeed, you do not need to monitor all charts of the many instruments that you can trade. The illustration above is only intended to give an idea that there are many opportunities that you can use.
In fact many traders are only fixated on one or two currency pairs. There are traders who do not want to do transactions other than the EUR / USD currency pair, or AUD / USD only.
There is nothing wrong with focusing on just one or two currency pairs.What is not right is to be “fanatical” only on the currency pair without even wanting to just glance at the opportunities offered in – for example – GBP / USD, USD / JPY, Nikkei, Hang Seng and others.
Focus ≠ No Care
It is true that to maximize your opportunities you must focus on the currency you are trading (if you are only forex trading ). But do not narrow the meaning of “focus” to “do not care” about the opportunities stored on other instruments.
What is meant by focus is when for example you have been eyeing opportunities in one pair , then you should continue to monitor the price developments in the pair . But before you get to that stage, you should first monitor the potential opportunities that might also exist in several other pairs .
For example, if you only open a forex trading account, then there are at least seven major currency pairs ( majors ) available, namely EUR / USD, GBP / USD, AUD / USD, USD / JPY, USD / CHF, NZD / USD and USD / CAD.
Well, before dropping a choice on one of the currency pairs, try first to pay attention to the seven majors available. If you are only “fanatical” of one currency pair, you will miss opportunities that might appear on the other six pairs.
What if you don’t find any chance at seven majors ? This is where the ” salesmanship advice ” mentioned above needs to be applied.
Try expanding the exploration to the ten available cross currency pairs .None too? There is no harm in glancing at Nikkei, Hang Seng, or Kospi.
In essence, “don’t just stop at one door”.
Beginner traders are advised to focus on just one or two currency pairs , while trading. This is to prevent the concentration from dividing. Even more important is not to become too greedy (this is a common disease that afflicts beginner traders) and overtrades , namely opening too many trading positions. The ultimate goal is to keep from stress.
But is it illegal to open multiple positions at once?
Actually no. The psychological condition of a trader is closely related to the strength of capital. You are allowed to open more than one position if the risk is still within your tolerance. Thus, your psychological condition will remain stable because even if there is a loss , you will still be able to continue living peacefully.
Examples of cases like this:
You have a capital of $ 5,000 (five thousand USD). Based on your analysis, there are several opportunities you can take, for example in AUD / USD, EUR / USD and GBP / USD simultaneously. All you need to do is calculate how much risk that might occur if you open a position on the three pairs simultaneously.
Let’s say the risk per transaction that you set is 10% of capital. The meaning is $ 500. When you do analysis and calculation, you see that the risk of loss in AUD / USD is $ 100, in EUR / USD is $ 200 and in GBP / USD is $ 200. That means, even if you experience a loss from a transaction on all three pairs , the total loss is only $ 500. The risk is still within your tolerance.
In such conditions, you can calmly open a position on the three pairs simultaneously.
But of course this strategy can only you run with sufficient capital. You might not be able to run a strategy like this if you have limited capital
To be able to “knock” more “doors”, make sure your “fingers” are strong enough. If not, yes blisters.