Ideally your niche would be something you know, love or see around you everyday. One thing you need to remember is that you should actually know alot about your niche topic to ensure that you have good original content to serve your readers.
It is best if you have first hand experience or expertise of some kind in your niche. In my case, toddler toys would be a great niche as my house is filled with them! And within that niche I could narrow it down to educational toys for toddlers too!
Likewise, take a good look around you, see what grabs your attention, notice what gets you interested or excited...and then work on making that your niche.
Read this great article by my Squidoo friend, Kim wrote about choosing your niche topic
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