Portfolio Trading

[Hebluc]

Hi Everybody,

dont know if this has been asked before, but just curious what everybody's thoughts are on trading a mixture of equities, bonds, fx & commodities.

Is this a better way to approach risk management/diversification or is it better to focus on a few fx pairs? Assuming you have a successful trading strategy.

thanks guys.

 

[NVP]

hey good question !

Clearly most financial Markets / instruments have correlation....its just knowing the direction, how much and when they are in force

I mainly trade pure Forex but do also have systems monitoring Commodities, Equities and Forex that gives me clues where the money is flowing

you have to see the whole picture to make money trading :smart:

N

 

[Patricia12]

I prefer to forex trading only and also go for risk management while trading currencies.

 

[tomorton]

Good question, I will be interested in the responses, but I don't believe there can be just one right answer.

Firstly, there are several schools of thought on what is the aim of diverisification - minimising risk, maximising gain, achieving parity with a selected index, or parity with peers in the market, etc.. Some traders will even seek a large basket of targets to trade, simply to keep busy and to feel they are working hard.

In addition, what looks like diversification is often multiple trades on what are really correlated instruments.