Portfolio thinking
Gecko here.
Last time I tried listing keywords with an awareness of "diversification."
- Diversified operation of automatic trading and discretionary trading
- Diversification of trading accounts (brokers)
- Diversification of currency pairs
- Diversification of the timeframes you trade
- Diversification of trading sessions
- Diversification of trade types
This time, I will consider the second point, "account diversification."
There are quite a number of FX brokers, and each broker also has various account types.
I think everyone opens their main trading account according to their own preferences, but have you ever consciously thought about "risk diversification"?
The risk of broker bankruptcy is not zero, though the probability varies.
Even if a broker goes bankrupt, if they have deposit protection measures, withdrawals of funds should be possible, but placing your entire investment funds with such a broker itself is a risk.
Not as extreme as bankruptcy, but differences arise in spreads, swap points, trading fees, and fees for using EAs, depending on the broker and the various account types.
Depending on the amount of funds you can manage, if possible, using two or more brokers and allocating funds accordingly is worth considering from a risk diversification perspective.
