Think Like A Trader Blog

Thursday, 14 January 2016

Why Do I Only Trade One Market?

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Why don’t I trade multiple instruments? Why don’t I drop down to the 1 min timeframe and scalp a few pips? Why don’t a jump onto the 1 hour timeframe and let a few trades run whilst I’m in bed asleep?

I used to do them all, believe me. When I was a beginner I tried to be a ‘jack of all trades’. And as you know, the rest of that statement is – ‘master of none’.
Now I only trade the FTSE 100, on the 5 minute timeframe. Boring, right? I’m missing out on so many trades! But I don’t see it that way at all.

Let me clear something up before I go any further – the 5 minute timeframe is slightly different from say the 1 hour or the 4 hour, because on the 5 minute timeframe, I can almost guarantee that on 90% of trading days, you will have a trade setup in whatever market you’re trading. This is not the case on higher timeframes. So if I was trading the 4 hour timeframe, and only the FTSE 100, I may be waiting weeks or months between trades!

However, with the 5 minute timeframe, I don’t need to jump between multiple markets. And what’s more than that – and I don’t care what anyone says to the contrary here – markets have their own personality, and it stands out MUCH more on the lower timeframes. This means that you truly can learn how a market moves, and what is likely to happen in certain situations.

So I don’t try and dive between markets and timeframes. I’m not interested in other markets, because I have spent so long learning the FTSE 100. For me it’s the same as looking at an athlete. Let’s say a football player, who plays in defence. I wouldn’t say to him, yeah, you do great in defence, but why don’t you switch to attack every now and again, you’ll score more goals!

The defender doesn’t care about his attacking prowess. He is focused on his singular role, and how to perfect it as best he can. The same goes for any industry I can think of. I don’t want a neurosurgeon to wake up one day and say, ‘you know what, today I’m going to have a look at patients with mental disorders and see how I get on.’

‘Jack of all trades, master of none.’


‘Master of your trade.’

That, in simple terms, is why I focus on the FTSE 100, 5 minute timeframe.

I hope you’ve all had a great trading week!

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