This article looks at the use of more than one strategy to trade forex rates.
When you trade on the forex market you will need to have a strategy that you are going to use. This strategy should be one that you are comfortable trading with. However, there are many traders who wonder about whether or not they should have more than one strategy when they trade the forex rates. It is important that you understand the use of more than one forex rates strategy. You should also consider the risks that come with the use of more than one strategy.
Why You Might Need More than One Strategy
The first point that you have to consider is why you should be looking at having more than one strategy. There are many traders who feel that the use of more than one trading strategy will only cause problems on the market. However, there are others traders who feel that the use of more than one strategy will increase the returns they make on the market. When you have more than one strategy you will be able to trade on different market conditions.
When you first start trading you are going to have one strategy that you use. This will be in one timeframe and work with either trends or ranges. When you have more than one strategy you can work in the other timeframes and look at different ways of trading.
The Risks of Multiple Forex Rates Strategies
There are a number of risks that you face when you have more than one forex rates strategy. It is important that you know what these are and how they can affect your trading. The primary risk of having more than one strategy is over-diversification.
When you have more than one strategy you are going to be diversifying your trading. This is something that traders are often in two minds about. When you increase the strategies that you use you will also be increasing the analysis that you have to complete. When you have more analysis to complete you are going to have less time to trade. When you have less time to trade you are not going to be making the returns that you are looking for.
Another risk of having more than one strategy is that you are going to over trade. As you complete more analysis you could be extending your trading times. When you extend your trading times you increase your exposure to the market and the amount of trades that you complete. The more trades that you complete the easier it is to fall into over trading.
Should You Use More than One Strategy?
Having more than one trading strategy is not the best idea for all traders. You have to consider this when you look at the different strategies. If you are happy with the returns that you are able to get then you should not increase the strategies that you are using. If you are not happy with the returns you are making then you should consider some alternatives before you look at new strategies.
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