CHOOSING A CURRENCY PAIR IN FOREX TRADING

By | September 9, 2019

CHOOSING A CURRENCY PAIR IN FOREX TRADING

CURRENCY PAIR IN FOREX TRADING – It is important for us to know these characters. How can we expect profit in forex trading, while we do not recognize the character of the currency pair traded?

For those of you who are still beginners in forex trading, maybe you can try the EUR/USD currency pair. This currency pair is essentially calm, the risk is also relatively low.

What about the profit?

Just relax, EUR/USD profit is quite decent with a fairly low spread. Want a more dynamic currency pair? Try the GBP/USD whose spreads range from 2 pips. You can take advantage of retraces of its major trend.

Want more challenges? We recommend GBP/JPY with spreads of about 8-9 pips. This GBP/JPY is very dynamic movement. If you are observant by entering at the right time, it is not impossible you will get a huge profit. Finding the currency pairs that are suitable for our trading is not easy. Persistence will bring you to find which one is fitting for you.

A few tips that you can use.

Learn the movements of this currency pair with different time frames, you can study the history of movement, as well as observe the times when the currency pair is active. It will also help you to know the exact moment for the open position.

Try out some options of currency pairs that you think are suitable for your trading style through the demo account facility. In the future, you will be able to reduce the choice of the currency pair you are trading in order to focus on the currency pairs that fit your trade style.

The Best Currency Pair In Forex Trading

There are 7 major currencies that are traded most often throughout the world. You must always trade in pairs. You can get the money both at general meetings and at the market.

So your choice will not depend on how well your currency economy is developing. Your profit depends on which position you take in each currency pair. Active traders can enter trading positions with all 7 of these currencies on the given Dealing Day. Long-term traders will wait to choose the best currency pair to trade when the opportunity presents itself.

I will dedicate this answer to traders like Jeanette, who are more than conservative traders. He balances the profession with his career and is an attentive wife and mother of two children. In our previous video, I saw the best trading day for long-term traders. Let’s say it’s Tuesday and you turn on your computer and look for a delicious forex dance floor. Here are some steps you can take to choose the best currency pair to trade currencies:

  • Open a chart with at least seven Currency Pair

This can be the time to read your morning coffee. Before you get rid of news and media noise, it’s best to look at the chart impartially to see how the market is developing. Which couple is under pressure? Is there any consolidation? Which couple moves up? Are there certain currencies that are identical to most other currencies? This initial and impartial interaction with the forex dance currency pair is important because it helps you prepare the next step in choosing the best currency pair to trade.

  • Read the latest market news

After your heart is set to several currencies, you can quickly get the latest global news in the local media to see if there are any unusual market updates. This might include a slowdown in the Chinese stock market, (missing) increase in interest rates or an increase in the Swiss franc. Reading news helps you determine the current market sentiment and the risk/risk situation of the best currency pairs to trade currencies. Usually, we want to avoid currency pairs that are exposed to a very large risk of volatility, because even though it can be said that you find opportunities to trade in volatile markets, I would argue that the chance of market turmoil and the lack of solid alignment increases Shock in the buttocks. It is always better to play it safe when it comes to investing your hard-earned money!

  • On the Investing blog, you will find the latest strategies for currency trading

Now that you have the most important news, see our blog for a longer and more solid strategy for trading selected currency pairs. If you find a currency pair that interests you, great! Read on to find out if this is the best Forex currency pair you can trade.

You also need to determine whether this pair is suitable for your portfolio. It is important to note that we do not publish currency trading strategies for each currency pair every day. The reason for this is our goal to reduce market noise and avoid forex traders from being misled into trading more than they should. We have found that traders with higher risk appetites tend to ignore the trading signals that we issue, regardless of whether it is suitable for their portfolio or not. To promote responsible trading, we limit our trading signals to only 3 per week. In addition, you will need in-depth advice for analyzing current accounts, open positions, available margins, investment portfolios, and more.

  • Pair a strong currency with a weak currency

The best currency pairs for trading are trend currencies. Because currencies are always traded against each other, the pairs that move most strongly are driven by a strong base currency and held by weaker currencies. For example, EUR / USD will move in a strong uptrend as the euro strengthens and the US dollar weakens.

AUD / JPY will move to a sharp downtrend as the Australian dollar weakens and the Japanese yen rises. Sometimes this also works if you choose a currency that is more volatile than a currency that has consolidation. In this way, you can base your analysis on currency trends.

  • Perform technical analysis

Return to your chart and do a quick technical analysis of the selected currency pair to find a trend or area. In this way, you can narrow your choices to the best currency pair that matches the strongest trend. Apply your technical analysis to this pair to determine support, resistance and rotation levels. Search your portfolio and see if your open position contains the currency you have chosen. You want to diversify your portfolio as much as possible. If you have traded in EUR / USD, it is best to choose a currency pair without Euros.

  • Reduce your currency pair with choices

Depending on your portfolio, trading personality, and the latest global developments, you can now target several currency pairs. If you can monitor the market as often as possible, you can choose a currency whose economy is at risk of experiencing an impending event. If you go on vacation and cannot stay in the market for a while, you choose a currency whose economy has a more stable future. Do the same for Cross Currency. Remember, these are all probabilities and trading is never 100% safe. What we are doing here is taking advantage of opportunities to work for our good.

  • Calculate the value of pips and your risk appetite

Some currency pairs have a higher peak than others. Higher pip value can increase your profit from trades obtained, but also your losses from lost trades. Calculate your risk tolerance to determine the suspension of your order and the correct limit. In this way, you can enter the market with confidence and know that you will not lose even if the pair changes direction from an open position than you can afford.

  • Go against the trading crowd, but follow your feelings

Surveys show that market participants often make mistakes with their positions! Although this is more a mathematical probability than a fact, sometimes we can use that metric as the final step in choosing the best currency pair to trade. Many brokers and social media (such as Scutify) express the latest market sentiment on many trading instruments, including Forex. The idea is to trade against most people. If most Forex traders are in GBP / USD long positions, it might be a good time to shorten this pair and vice versa. This is especially useful for shorter positions. Also, remember that the analysis of the feelings of the contrarian is the final step in your overall fundamental and technical analysis and should never be used alone. Finally, trust your instincts. If you don’t feel safe entering the market, then don’t force yourself. Remember, if you enjoy positive trading, the results are more than just money in your pocket.

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