#firstdealofthenewyearFateema Diversification refers to the strategy of spreading investments across different currency pairs to minimize risk and minimize returns. Types of diversification 1. Currency pair diversification:investing in multiple currency pairs,such as EUR/USD,USD/JPY. 2.Geographic diversification:investing in currency pairs from different regions,such as Europe,Asia,and the Americans. 3.Assets class diversification:combining fx investments with other assets classes, such stocks,bonds,and commodities. Benefits of Diversification 1.Risk reduction 2.Increase potential returns 3.Improved stability