Not every retail trader understands the important of choosing two or three forex asset to major in, in the forex market. Most struggling forex traders jump from one asset to another, from one strategy to another without a clear plan and goal. Let me ask you, as a retail trader, what asset are you trading in Forex?
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This is why choosing asset to trade matters in forex
One of the reasons you are still struggling in forex trading is because you don’t take forex as an investment; if you do, you will choose two or three forex asset- study them, understand their historical chart and invest in them with a clear plan.
When I started Forex trading, I was trading only GBPUSD and US30; the idea behind my decision was to focus only on two asset, dedicate my time and resources to understand them so that I can make informed decisions when am going through their respective chart. As I advanced in trading, I came across Synthetic indices (Boom and Crash), so I added C500 and C1000 to my trading asset, Then V75 and Gold. Choosing few asset to trade in made me become a master in those assets.
Trading in Forex? This is how to choose your own trading asset
1. Consider your equity
One of the factors you should consider when you want to choose a forex trading asset is your equity. If you have a small equity with no experience, it better to avoid high volatile pairs. Because a little reverse against you can blow up your account. So start with a less volatile pair; and upgrade as you advance with knowledge.
2. Consider Your Trading Schedule
You have to consider your time. There are asset that are available for you to trade 24/7 like synthetic indices offered only by Deriv. Which means you can trade when you are done with your 9 to 4pm work. They are those that are only available on weekdays, so understanding your trading schedule will guide you on how to choose your trading asset.
3. Consider your Risk Level
Before answering the question of “what asset are you trading in Forex?” or you want to trade in Forex, you have to consider your risk level. Forex is a high risk investment so you need to consider this when choosing your investment instrument.
4. Consider your trading plans/goals
Your trading plans and goals matters. This is what decides what you want to get from trading in the long /short term; If you are in forex for investment you need to consider low volatile pairs in the beginning then upgrade to volatile pair as you advance. if you are in for quick gains, then consider high volatile pairs (but they are very risky however they provide quick high returns)
Choosing a forex pair to trade is the surest way to develop mastery for the pair you choose and then use that knowledge as an investment vehicle to explore and make money in the forex market. So don’t just be in the forex market, choose two or three pairs, study them, master them and enjoy the forex market