Market Specialisation - Is there a need ?

[*JDR*]

Getting a bit post happy here today.

But, i've never been afraid to ask a question even if it does come out being "stupid" (there are no stupid questions!!)

I've been starting my education and have a question over specialisation.

Now, if I am a Technician, then in theory everything that I want to know about the share is reflected in the price.

(Hey! this sort of goes back to my days at uni and efficient market hypothesis!! - Wow, who said I wasted my degree)

So based on that premise, if it is in fact correct, then what does it matter that I am trading commodities, futures, currencies or shares etc. ?

Is it all really down to personal preference? Is there anyone out there who trades multiple markets? And how successful are you?

Thanks

 

[fxmarkets]

Pimp My Trades !

"Hey Fx Pimp My Trades......."

well alrighty...... Bend Over and drop em.. they be a swinging tonight...

hmm, seems to me that there are a few cats. of traders, ie what it means to them how we each perceive the game to be played or that is played. I detect a camp who do not seem tuned in to speculation trading as I would term it. With that I'd say it makes sense to focus / specialise in 1 market..developing /obtaining your footprint with it as Socrates has mentioned, in order to learn to trade from a speculative stance...

"So based on that premise, if it is in fact correct, then what does it matter that I am trading commodities, futures, currencies or shares etc. ?"

not really but if you dont know what you (or the big dicks) are doing (Trading/speculation) in say currencies how do you expect to speculate in stocks, grains, oil etc..... ?

Maybe think about ©Speculation Analysis (© I like it ) efficient market hypothesis ? ok err, yeah, but aint humans bent? dishonest, corrupt, and down right sneaky? money wouldnt do this would it? errrr.... yes, for we are human.....



Fx.

 

[Jack o'Clubs]

I can see the arguments for specialisation, and I think someone who trades a small number of markets is likely to be a better trader in those markets than a generalist. I think this is increasingly applicable as time-scales move down intra-day.

On the other hand, I'm with you with the 'all in the price' argument and so I screen for certain set-ups across a diverse landscape and it seems to work for me as long as I take differing volatilites and risk/reward into account in my money management. It also has the advantage of keeping me invested to some degree pretty much all the time with a nicely diversified portfolio. But I trade EOD data - if I went intra-day I'd certainly look to cut the list to a few favourites.

I don't think you'll find a 'right' answer to this one - just do whatever feels comfortable.

 

[Tuffty]

My view is that it would depend on what advantage you have over the market. It could be a profitable set up based on human nature that you've spotted is in all markets, or a particular niche based on market structure in one particular market.

 

[*JDR*]

Thanks for the replies thus far.

and apologies for the dramatic oversimplification of EMH

I am trying to work out what may be possible, but i will myself be specialising at least for the foreseeable future. At this stage I don't think I could cope with multiple markets.

Though I think, in theory at least, trading different markets should be possible if they behave in similar ways, such as strong trending markets..... of course there is no guarantee this will be the same in the future.