While at the screens today , I was asked this question, “Why do I trade the same markets” my response was that I feel comfortable in the reading the FTSE chart and happy with the return, as the conversation progressed we entered the topic of which are the better instruments , indices , FX , commodities or stocks. As we all trade different I started wondering if a chart is a chart does it matter what it is.
Personally I prefer the FTSE as always gives me a return and I can plot my trades very well so never really look at much more. I like the idea of stocks but the vast amount to try and filter is a nightmare where as the FTSE traded daily you create memory muscle by seeing the same chart constantly.
I trade some of everything. If you’re looking at stocks I prefer the large cap stocks as they’re most liquid and move similar to currencies. I map out the same S/R zones and chart patterns, so IMO ‘a chart is a chart is a chart’.
Reading price action and technical analysis for me seems to be most effective with currencies and indices, less so with shares.
I trade shares but when I do I factor in much more “fundamentals” as there is a bit more going on with shares like dividends, earnings, debt and the like that need to be factored in in my opinion at least. I have had great trades from shorting a company due to a dividend cut or buying after the fallout from a dividend cut seems to of reached a “bottom.”
An example of this would be CTL they had a fat dividend over 10% that was slashed in half. This cut still left the company with a very nice dividend yield though so the sell off to me seemed over aggressive. I waited for price to hit about $11.10 a share and ended up selling a little above $14 a share. I did not really look at the price action for this trade and it wasn’t a quick trade either.
My strategy when it comes to shares is a bit different than forex. I prefer shares for growing wealth as a buy and hold investments. They can most definitely be traded though.
Why do you trade the same market? Why would you want to trade different ones? If your day trading or short term better to get to know those markets intimately.
I trade the Dow, Gold and Gbp.
I have taken all other instruments of my platform - that might seen extreme but it keeps me from jumping into markets just for the hell of it.
I was told that the best traders at hedge funds all trade one market only
I have no way of verifying this but it makes sense to me.
In my opinion specialising is always better than being a generalist
I think the best instrument or markets to trade are those that your the most comfortable with.
And yes I think that chart reading is universal in a sense but every instrument has a unique personality so to speak that must be taken into consideration.