Should You Specialize in One Market or Trade Many?

In today’s episode, we are going to be discussing whether you should trade one market or many markets when you start your trading business.  A lot of new traders tend to spin their wheels by jumping from market to market, whereas the majority of consistently profitable traders focus on trading one market exceptionally well rather than try to trade whatever’s hot!  If you have been struggling with finding consistency in your trading, this episode has been created for you! So to trade one market or many markets - that is the question! Unfortunately there is no cookie-cutter answer to this and it really depends on where you are in your trading journey!   Before digging into this, let’s have a quick look at some of the benefits and drawbacks of trading one market versus trading multiple markets. Trading One Market  You become a specialist; the more screentime and experience you get with one market, the more you pick up on different nuances (identifying moods of market participants, key levels that are being defended, etc)  Prevents overtrading - most traders lose money because they trade way too much!  Manage risk and exposure more effectively  Reduces the temptation to trade if there are no quality setups to trade Easier to build consistency in execution of process  Drawbacks  You might start to force trades out of boredom if there are no valid trading opportunities present If other markets are moving and your market is not, you may feel like you are missing out on potential profit opportunities (FOMO)  You’re not gonna be cool at parties - but you will be among the most successful Trading Multiple Markets  Potential to make more profit when compared to trading a single market   More trading opportunities on a daily basis Less likely to force trades out of boredom or FOMO  Drawbacks  Harder to manage risk effectively across multiple markets due to various tick values and margin requirements  Mental capital drains a lot faster when tracking multiple markets  Analysis paralysis can become an obstacle especially if there are setups forming at the same time  in multiple markets Often leads to tail chasing - you become a jack of all trades and master of none!  Now that we've identified some of the benefits and drawbacks of trading a single market versus trading multiple assets, let's focus on where you should start depending on where you are in your trading journey.  If you are a new trader, then you will want to start with trading one market!   This reason for this is if you haven’t found consistency in your results or if you're still losing money in one market, then adding more markets to your plate will only drain your account three times as fast. In order to give yourself the best chance to survive and thrive, you will want to first build consistency in executing your process in one market.  Once you have several months of consistent profitability under your belt in one market, then you could look to add a second market to your daily routine.  When considering which market to add to your arsenal, its a good idea to make it one that is correlated to your primary market.  So if you specialize in trading the S&P500 e-mini futures, you might consider adding a market like the Nasdaq futures (positively correlated) or something like the 30-year US Treasury Bond futures (inversely correlated). This way your knowledge of your primary market will transfer over via the relationship to the other market! Most experienced traders have a go-to market to trade but will also trade one or two other markets when there is volatility because movement is opportunity. If you are an experienced trader with a few years of trading experience and a track record of consistent profitability then you will have a bit more flexibility with trading multiple assets.  You'll notice seasonality and patterns across different markets and specific months