This is one of the best ways to reduce risks. For example, you buy stock (see) from several companies. You calculate that if the value of the securities of some corporations will start to decrease, then the value of others will certainly grow. The same in the foreign exchange market (see), you don't invest all your money in one transaction on one currency pair and make a few small purchases (or sales) from different pairs. It is quite a reasonable approach so you can almost certainly expect to receive income. Traders are very fond of the phrase, with regards to the principle of diversification: "Do not put all your eggs in one basket" (a sudden drop and they will break, its better to put them in different places and save something).

Back to list

Citadel of Trading