How many forex positions should you actively trade? While you can hold as many positions as your account size allows you in stocks, in forex trading, it is a different story. Today we are holding off all the other key factors when it comes to investing, such as market analysis, margin and leverage, and only focusing on the number of trades you should be focusing on at a given time.
How Many Forex positions should you trade at a time?
Winning in forex comes down to discipline. Even the best of us can get caught in greed or fear when the markets get volatile, leading us to make a hasty decision that could have been easy avoided if we were focusing on fewer trades.
Another key factor in forex is that there are only a few currencies that you can trade with high liquidity. So chances are, if you are trading a ton of currency pairs, you are repeating one common currency in your trades. For example, if you have positions on EUR/USD, USD/JPY and GBP/JPY, you are exposed to double the risk on both USD and JPY. If you are bullish on USD, and the market is in your favor, that’s awesome!
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But if USD starts to get weaker, your heart will start to race. And if you have any more positions than this which contains the USD, you could even wipe your account out on a short-term market knee-jerk. Remember, it is always better to be safe, than sorry.
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There are of course exceptions and I’d love for you to share your forex trading stories either on our Facebook page or YouTube channel. Have you ever got lucky or unlucky trading multiple pairs at a time? How do you keep yourself disciplined when it comes to forex trading? How many forex positions do you hold at a time?
This article was originally published on InvestDiva.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
