As you have seen, many trade opportunities exist in the foreign market and you now understand how to locate them! Remember these few useful details and you will be doing yourself a big favor:
- Crosses create more opportunities for traders by giving them more currencies to trade.
- Typically, trends and ranges are cleaner on currency crosses than they are on the major currency pairs.
- Trading crosses allows you to take advantage of differences in interest rates.
- Make sure to analyze any currency pair you plan to use, and match the strong against the weak.
- Don’t worry if the pair of currencies you want to trade isn’t available at your broker, since you can create a synthetic currency pair by taking two major pairs out at the same time to create the cross.
- Three of the most popular crosses involving the euro are EUR/CHF, EUR/GBP, and EUR/JPY.
- NZD/JPY, GBP/JPY, and AUD/JPY are the three most attractive currency pairs against the JPY. Each one creates the highest interest rate differential which means better profits.
- If you decide to trade more obscure currency crosses, look out for the unpredictable swings that you will often see.
- If you decide to stick to just the majors, crosses can still help you decide what pair to trade. Crosses help signal which currency is stronger.
- It is important to remember that any movement in cross pairs can affect the majors as well.
- Please also remember to pay attention to the pip value of any crosses that you are trading. The value of crosses will range compared to the majors. The pip value will help you figure out any risk analysis.
- So, on those days that the majors just aren’t working for you, or you need to stay away from the USD because of a major event, give those crosses a shot. You may like what you find.
We wish you the best of luck!
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