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Nick Goold

You will likely be a more successful trader if you focus only on a few markets rather than trading in many. However, sometimes changing at the right time can help to increase profitability. So when is this the case?

Reasons for changing markets

1. Market changes

Take a break from trading when the market is less volatile and moving less than usual. Trading is about making a profit on marginal gains. Even if the market is the same as usual, do not open positions during quiet price movements when it is more tricky to make small gains. It takes much longer to reach a price target or stop-loss level when the price is moving slowly.

In such situations, it can be beneficial to trade in a different market, instead of waiting for the usual market volatility to resume.

2. Losing streaks

If you have been losing for weeks or months, it is advisable to look for another market. Experiencing losses over a prolonged period can be depressing and cause a significant drain on your account funds.

In these situations, changing markets can also help break a bad trend. It's vital to learn from your losses and use your improved trading strategy to find a way to trade profitably in a new market. However, you should be careful not to change markets often. It's common to see traders who keep changing markets because they can't win, but this is not advisable. In most cases, it's not the market that needs to be changed, but the strategy, entry points and settlement points that need improvement.

3. Lifestyle changes

The market is moving 24 hours a day. When your lifestyle changes, it means you should trade at a different time of day and you may need to change to another market.

In these cases, look for times when you are available to trade and can concentrate on it. An hour or two of trading time is sufficient. Find an active market during that period and practise trading in it. Trading requires a high level of concentration, so make sure that your trading hours are dedicated to trading.

How to change markets

1. Start with small funds

When trying a new market, start trading with a demo account first. Then start with small amounts in a real account. A new market is never easy to trade in, and, at first, you'll have limited experience. To protect your money, start safely and demo trade. After you've been able to make a steady profit for two or three weeks, you can move on to do small trades with real money, and after you have been able to make a steady profit for two or three weeks, you can gradually increase the size of your positions.

2. Analysing trade results

Keeping detailed trade records can help deepen your understanding of a market. Instead of simply noting the profits for each market, analyse the risk-reward ratio for each market you have traded, and compare the average profit to the average loss. In this way, you will be able to understand which market is making you more money and you can then concentrate on that market. The trade record also allows you to objectively see whether you were following the trading rules by noting entry and settlement points on the chart, which will allow you to make adjustments in your new market.

3. Take your time

It takes time to get used to a new market. Be aware that it will take time, and spend time studying the market first to find a profitable strategy. The more analysis you do, the more your trading knowledge will improve, which will positively influence your results. However, be careful not to look at too many strategies in your search for the best one to use. There will always be times when a strategy is right for a particular market and a time when it is not. Remember that you will need to have the skills to adapt your strategy to any market.