Specialisation v Diversification

[trendie]

In the light of a couple of recent threads, I am interested to know whether traders consider specialisation more productive than diversification.

Consider, the "british inventor cracks currencies" thread.
And also, to a similar extent, the FX Pip Monster, or whatever it is.
Consider, their apparent stellar performances, garnering pips counted in many thousands every month.
But, on closer inspection, these pips are made over several FX pairs.
When you compare the pips made divided by the number of pairs traded, the returns are mediocre at best.

I am not interested in whether its merely a ploy to bring in people who do not apply some analysis, we'll leave that to one side.

I would like to know how many focus on just a handful of markets, and how many focus on a broader spread.

I fully appreciate the markets played is a function of your timeframe. The lower your TF, the smaller the number of markets traded.

I know wallstreet1928 trades a handful on the smaller TFs; the reprobate wasp trades GJ on the 4-hrs exclusively.
(I trade 3 FX pairs (merely observing the GJ) on an intra-day basis)

 

[arabianights]

If I had unlimited funds I would prefer to do soros-style macro trades with no particular specialisation other than trading my world view in huge size.

Back in the real world, I think specialisation is essential.

 

[Igat]

I am with arabianknight here specialisation is key to our real world trading. I have at present a high comfort level with trading one pair whilst I expand my knowledge of a second. I think I will eventually get to three and just stick to that. I don't think I can productively manage more than three but then I may increase my skill level and prove myself wrong or even more likely discover the holy grail trading plan and mange 10 pairs. :smart:

 

[blancspa]

Is Forex a one market?

 

[foredog]

The problem woth speculation is that when your mkt has a week off so does you bank bal. (if you don't believe me google Don Miller, made $1.6 last yr this yr nowhere near.)

BUT to diversify you can't look small TF on more than 3/4 mkts so maybe the answer is to find a few that do well short Tf and also a stable of others that u can trade LT

 

[N Rothschild]

If I had unlimited funds I would prefer to do soros-style macro trades with no particular specialisation other than trading my world view in huge size.

Back in the real world, I think specialisation is essential.

this is exactly what i want to do...