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Nial Fuller

NIAL FULLER
Professional Trader, Author & Trading Coach

Why You Should Have a Favorite Market to Trade

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By in Forex Trading Blog Last updated on | 22 Comments

I get many emails from beginning traders asking me what are the best markets to trade. However, today’s lesson is not about that topic exactly, although if you want to know which markets I recommend you start out with, click here. Today’s lesson is about why you should have a favorite market to trade. In other words, one market that you are intimately familiar with and that you trade more often than others.

Having one market that you’re a Jedi Master of, can help you become more of a specialist, and specialists are people who make the most money in life (think surgeons, lawyers, pro athletes etc.) You don’t have to only trade one market, but I recommend focusing on a small handful of markets and having one of those that is your favorite. For example, for me, since I live in Australia, my favorite currency pair is the AUDUSD. I am more familiar with what moves it and how it moves than other pairs since I am of course more familiar with my home country and its inner workings. Someone living in the UK may favor the GBPUSD for example, for obvious reasons.

Let’s discuss some of the other major advantages of having a favorite market to trade:

Becoming a specialist in one market

If I told you that I knew someone who was a master at trading the AUDUSD, would you not assume that person was better at trading the AUDUSD than someone who trades 15 other Forex pairs? I think you would. We all know that practice and repetition are the precursors to being wildly successful at anything, and clearly, someone who is a master of the AUDUSD market has practiced in and focused on that market much more than a trader who trades 15 other Forex pairs.

A brain surgeon doesn’t become a brain surgeon by going to school for 10 different things. He or she goes to medical school and they specialize in brain surgery, if they didn’t, they wouldn’t be brain surgeons. A professional golfer doesn’t become a professional golfer by also trying to become a professional tennis, basketball or football player, do they? To become wildly successful at anything in life, we must dedicate the majority of our time to it, this is just a fact of space, time and human nature.

Why then, do so many people think they can analyze and try to trade 20 different markets successfully?

It only goes to reason that the more you focus on one thing, the better you will be at that thing. This is the primary reason you should have a favorite market. You don’t have to only trade one market, but you should have one market you’re more familiar and closer with than any other. This will also help you to know when that market is in a choppy condition that isn’t worth trading vs. when it’s in a trending condition or other lucrative condition.

Helps avoid over-trading

I’ve said it before and I’ll say it again, the fewer variables you deal with as you analyze the markets, the better off you will be. Focusing on one market and having a favorite market is a natural deterrent against over-trading and over-analyzing.

Most traders lose in the long-run because they trade way too much. Obviously, you’re going to trade a lot less if you’re primarily concerned with one market rather than twenty. Having intimate knowledge of the price action and dynamics of one Forex pair, for example, is going to also help you understand the market as a whole. Since many Forex pairs are correlated, if you know what one pair is doing and you’re very familiar with it, it’s going to help you understand the other markets that you follow, better.

I’ve written articles about why less is more in trading, the sniper approach to trading and what crocodiles can teach us about trading, amongst others, and the idea of having a favorite market as your go-to-market fits in perfectly with the concepts I discuss in those lessons.

Helps fight over-analysis

Having a favorite market also helps you remain more focused and clear-headed. It helps reduce confusion and over-analysis of the market. Trying to analyze many different markets is very likely going to result in you becoming overwhelmed and confused, which usually leads to entering a bad trade and losing money.

My suggestion is to have a favorite market and let that be your foundation. You always start your analysis there each day. Then, if you want to add a handful of other major markets later, you can do so. But, I strongly recommend in the beginning, you start by becoming intimate with one market. I would say there never is really any reason to follow a lot of markets. I personally only follow about ten markets on a regular basis and I have a favorite Forex pair as I said above, also a favorite commodity and a favorite stock index, I suggest you eventually follow suit.

Helps you manage risk properly

Traders who are hung up on analyzing many different Forex currency pairs often end up over-leveraging themselves because they take trades in multiple different pairs at the same time. Especially due to correlations of currency pairs, this is really a dangerous thing to do. Unless you are going to divide up your overall 1R risk among the multiple pairs your trading simultaneously, there is no ‘safe’ way to take multiple positions in multiple FX pairs at the same time.

In this way, having a favorite market, especially one favorite Forex market, can help you contain your risk. If you’re most likely to only trade one pair, you obviously are less likely to over-leverage your account by trading multiple pairs at the same time.

Reduces temptation to trade

Imagine you only look at one pair ever. You don’t have to do this of course, but let’s use a hypothetical scenario for a minute. If you only ever had one chart open and that was the only market you ever looked at, how significantly do you think you would reduce the temptations of the market? As I said above and many times in other articles, traders mostly lose due to trading too frequently, so if you simply limit the number of markets you look at it, you are going to drastically reduce the temptation to over-trade and thus drastically reduce your chances of losing money unnecessarily.

Conclusion

Try focusing on only one Forex market for a few months, pick one you feel the most comfortable with and that you know the most about and really get intimate with it.  Of course, before you can successfully trade any market, you need to learn to read a price chart and the price action patterns that appear. Getting familiar and ‘intimate’ with one market’s price action is really the core objective for any novice trader. Once you master one market you can start adding more.

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About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 20,000+ students since 2008. Checkout Nial's Professional Forex Course here.
  1. Roy Peters September 19, 2017 at 12:49 am

    I made more money trading EUR/GBP than any other pair. That is my favourite pair. I watch it real close.

    Reply
  2. wami ikechukwu kanu June 14, 2017 at 12:13 am

    i just read this article now and i just smiled cos i ONLY look at four pairs EURUSD, USDJPY, USDCHF, EURCHF

    Reply
  3. O Utan June 2, 2017 at 3:11 pm

    Thank you for your article, Nial. After reading I checked my last month’s trading record. And found that AUDCAD pair gave me the highest win rate. I’ll focus on this pair from now on.

    Reply
  4. Edubliss June 2, 2017 at 2:41 am

    Less is more in forex as u always say. Already got better by focusing on less currency pair

    Reply
  5. Khesiwe May 30, 2017 at 2:55 am

    I would try to focus on one pair thanks Nail very nice article.

    Reply
  6. Prince May 30, 2017 at 2:06 am

    This is great! Of course another reason why beginners loss money.
    Thanks Nial.

    Reply
  7. Laura May 30, 2017 at 12:04 am

    Am very exited realised my mistakes and I know by recrltifying all ill be a successful trader cheerd

    Reply
  8. henryadex May 29, 2017 at 1:36 am

    As i just added more pairs to my platform i opened my mail and i discovered your article, what a timely interference. You are simply great

    Reply
  9. Frank Bazuaye May 27, 2017 at 9:08 am

    More market help you diversify ,and help have a broader view. I trade price action . I look for pattern in different market. (WATCH LIST) . If there is no setup in one market, other markets might have setup. The key i reckon is having a plan.

    Reply
  10. Dan May 27, 2017 at 3:19 am

    Hi,
    If someone prefers to trade crosses like EUR/GBP, then does it mean that the one needs to be aware of the EUR/USD and GBP/USD? If so, then you need to have at least knowledge about 2 markets.

    Reply
  11. Anne May 26, 2017 at 8:13 pm

    Thank you for this article. Such an eye opener. I have been all over the markets and have definitely been confused of late…. As Patrick i too have been over analyzing.

    Reply
  12. Max May 26, 2017 at 1:04 pm

    Nial,
    Too true… I am live example of loosing money on Multiple consecutive pairs without realizing the multiplication of the Risk.

    Now I focus on way less pairs…

    Thanks again Nial

    Reply
  13. KRISTOFA OKENTA May 26, 2017 at 6:21 am

    Very true and direct advice.

    Reply
  14. Thabo May 26, 2017 at 5:00 am

    Excellent advice Nial, I am victim of over analyzing more 4 currency pairs loose my profit daily.
    I leave in South Africa and will start to focus on USD ZAR until I master the game and be accurate like a sniper / crocodile.

    Thanks very much for your brilliant advices

    Kind Regards
    .

    Reply
  15. Hettie May 26, 2017 at 4:52 am

    hi Nial, you gave a 7 step plan, i added nr 8– to read an article every day/time I’m checking in. I’m starting to see positive results, thank you. and yet again the knowledge of this article is well accepted. This is eye opening. And will the definitely less stressful to reduce my currencies. At least from 10 to 5 for a while.

    Reply
  16. Maureen May 26, 2017 at 3:20 am

    This is SO GOOD. Thank you. Just a brilliant article. May all new traders find Nial, and take his wisdom to heart. Makes so much sense! Clarity in Forex World is pretty amazing.

    Reply
  17. Ivane Zurabishvili May 26, 2017 at 12:46 am

    Hi Nial, many thanks for this interest article

    Reply
  18. eddie reid May 26, 2017 at 12:06 am

    Nial your info s always outstanding ,it helps me tremendously!!!!!!!

    Reply
  19. Haaan May 25, 2017 at 11:05 pm

    Hi Nial
    You say to me success secret is that
    Very clear message
    Thanks thanks thanks

    Reply
  20. Alan May 25, 2017 at 9:49 pm

    Sound advice once again.

    Reply
  21. Chris Conolly May 25, 2017 at 9:28 pm

    Thank you Nial,

    I too live in Australia and do try and concentrate on the AUD/USD pair. I am still learning and
    will hopefully learning till the day I die as my father once said to me. I log into LTTM almost
    every day and I have only commented in the forum a few times as I am still trying to get a handle on the terminology and price action. Thank you to you and your team and your members as it is all helping I think!!!!! It would be nice to hear more of your thought on the above pair if possible. Regards Chris Conolly

    Reply
  22. PATRICK May 24, 2017 at 8:40 am

    Thank you Nial for this wonderful information. I sure will slash down the numbers of pairs I follow in the market because this article has revealed to me that am a victim of over analysis.

    Reply

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