When you first open a trading account you see a huge number of instruments. Currency pairs, stocks, indexes, gold, oil and lately cryptos like bitcoin and ethereum. It’s a whole new world full of opportunities.
It is indeed better to have a choice but making the right one can actually be the difference between failure and success.
The majority of traders prefer to go where there is most volatility. In their minds more profit equals prices going up and down sharply and even violently. You could agree that this actually does give a better effort vs. time reward. The majority certainly is happy with doing things this way.
“Specialized” traders on the other hand, prefer to trade less frequently on one or a several instruments. It definitely causes less stress because it requires patience and waiting for specific conditions to align.
Waiting for that split second when the entry point for scalping happens is not required here and your window of opportunity can be as long as hours or days.
Fans of this style see these longer periods for entry and exit as an advantage. They focus attention on fewer variables and can identify the moments that are like a green light to open or close a positions. Some even start to develop a “feeling” for the chart and what it’s going to do next.
With so much time spent looking at the same chart through different situations and circumstances you can start literally “reading” it. It all comes down to confidence in what you’re seeing, an “deja vu” hunch.
But a feeling that the future will be just like the past is not the right way to go. Past results don’t guarantee future performance. A more detailed and studious approach like Elliott Wave is preferable in these situations – that way you are analyzing and anticipating, not just guessing.
Another way that you can limit guessing it use demo accounts to see if trading a larger number of instruments is for you. You can get a two for one – getting familiar with the functionalities of a desktop or phone platform AND determining your ability to trade multiple instruments at the same time. All while risking no money.
You could find that battling on several fronts isn’t your thing. Or chasing all opportunities might just be your jam. Missed opportunities are the strongest argument against trading less – the fear of missing out.
There actually isn’t a perfect answer to the question how many instruments you should trade. Both paths are worth testing for yourself. Identifying which one is for you is actually the harder bit, because your personality and trading style might not be in line with the aforementioned fear of missing out. Or it might not be possible to trade so much because of other things you’re doing in your life.
If you prefer to trade with less risk and if you have an account with a smaller deposit, then one or several instruments could be the way to go.
If you’re a bit more aggressive and can trade every day and want to get in on the action – then go for more instruments but find your limit.