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Forex strategies offer enormous profitability, excitement and the ability to make a living trading. Surely it takes a lot of effort and dedication to become successful, and even after one becomes successful in foreign currency trading they still need to explore more possibilities such as for example expanding from day trading forex to investing in foreign currency for prolonged periods of time. Opportunity is so big and diverse, and so are the inherent risks of course. But everything in business has risks. The good thing about the financial markets is that they offer more flexibility, liquidity and massive exposure as opposed to traditional business. In traditional business for example there is the so called "restaurant" syndrome. This is a term often used to describe people who want to start a restaurant but are not fully aware of the risks involved because the market is limited and always small and local. Restaurants have a high failure rate, more than 60%, and there is not much flexibility for the business owner to change things when things go wrong. In financial trading the risks are great too, but there's flexibility and the market is massive. Traders can fail in one currency or time frame, and still make money in another currency or another time frame.
Being a specialist works for some traders, but other traders are specialists in the trading method rather than the asset they are trading. Short term trading is more about being a specialist in the trading method rather than the market. But longer term trading and investing takes into account fundamental factors and that is where it is better, much better to focus on one market. Fundamentals are unique to each market, so when one invests or trades long term in a currency, they'd better know it well. Fundamentals go away for days and days, but they can come into the market at any time and take control of everything. So they are deceptive in nature, or at least make markets work in deceptive ways, making traders think that technical analysis has it all figured out. Being a specialist is also more interesting from the trader's perspective as they understand the market in more depth. Diversification on the other hand, though appealing to some, doesn't seem to offer a real edge in serious trading and investing. And the paradox of diversification is that as one keeps on diversifying, the profitability of their portfolio tends to track that of the overall markets.
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