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  1. #1
    Administrator Martin Kay's Avatar

    Everything you need to know about trading currencies !!!

    special review on currencies - facts and effects, including tips on hot currency pairs (forex).

    Originally posted by Bogdan G. Click here for the full review.


    EUR/USD

    My Advice on EUR/USD in 50 Words: It is highly volatile during news announcements so you should stay away from this currency pair at least 30 minutes after the release. False moves and whipsaws are frequent at those times and that makes technical analysis very difficult and unreliable. One more tip: if Mario Draghi (Current President of the E.U. Central Bank) or Ben Bernanke (Current Chairman of the U.S. Federal Reserve’s) is speaking, let them finish before trading. The reason is the same as the one mentioned above.


    USD/CAD

    My Advice on USD/CAD in 50 Words: Canada is one of the largest Oil providers for the United States. Due to the large volume import – export business, the economies of the two countries are highly interconnected and this makes their exchange rate to be pretty stable, having a low Daily Range. Oil price can affect the rate.


    USD/JPY

    My Advice on USD/JPY in 50 Words: Due to the relation between the US Dollar and the Japanese Yen, this pair tends to be less volatile in normal conditions. It is known that Bank of Japan intervenes in the market in order to stabilize or modify the exchange rate and this can lead to sudden spikes.


  2. #2
    Senior Member Grae's Avatar
    Well put. Some recommended EURUSD as the training ground for new traders. What do you think?

  3. #3
    Specialist Member RCox's Avatar
    The correlation with the Oil price and the Canadian currency is an interesting factor but other than during the massive rise on Oil to the all time highs around $150, these correlations tend to be useful for shorter term trades rather than forecasting long term trends.

  4. #4
    Master Member Bogdan G's Avatar
    Quote Originally Posted by Grae View Post
    Well put. Some recommended EURUSD as the training ground for new traders. What do you think?
    Uh, sometimes EUR/USD has idiotic movement, a lot of whipsaws and irregular reactions to the same economic indicators (same numbers can generate this month a move up and the next month a move down). It is one of my favorites and the first currency I ever traded, but I've learned to "respect" it so i am very conservative when i trade it and stay away during high impact news.
    About learning using EU as a training ground....well, it could have some advantages because if you can successfully trade such a wild horse, then other, more docile pairs will be easier for you to trade. I think it differs from person to person. Anyway, I consider AUD/USD more trending (not always, but usually is more docile)

    Have a great weekend

  5. #5
    Master Member Bogdan G's Avatar
    Quote Originally Posted by RCox View Post
    The correlation with the Oil price and the Canadian currency is an interesting factor but other than during the massive rise on Oil to the all time highs around $150, these correlations tend to be useful for shorter term trades rather than forecasting long term trends.
    Yea, you're right, Richard. I think long term trends cannot be predicted just based on this correlation, but rather short term movement. Some years ago (can't really remember) USD/CAD made some wild moves during 2-3 trading days and during a talk with my broker at the time, they told me about this correlation and the fact that Canada had most of their roads closed due to heavy snow and ice. So transportation was down, no oil could be exported and that generated the weird moves in USD/CAD. This is one of the few things I learned from that broker
    All the best and have a great weekend

  6. #6
    Master Member vinayakm's Avatar
    Great tips! Really enjoyed it and I felt it give me what I needed to know in a concise manner. When going into something like Wikipedia to look this up, it can be too detailed and 'beat around the bush' so to speak.
    Definitely like the casual tone which made it easier to understand than something like Investopedia.
    There wasn't much on exotic pairs, though. I suppose it is because they are rarely traded given their high spreads. But they do have their trading opportunities like the minor pairs.

  7. #7
    Master Member Bogdan G's Avatar
    Quote Originally Posted by vinayakm View Post
    Great tips! Really enjoyed it and I felt it give me what I needed to know in a concise manner. When going into something like Wikipedia to look this up, it can be too detailed and 'beat around the bush' so to speak.
    Definitely like the casual tone which made it easier to understand than something like Investopedia.
    There wasn't much on exotic pairs, though. I suppose it is because they are rarely traded given their high spreads. But they do have their trading opportunities like the minor pairs.
    Yep, I agree, not too much on exotic pairs, I just wanted to mention them and not explain too much because I don't know any broker that offers binaries on them. U are right, the spreads are huge and there's not a lot of volatility in them.

  8. #8
    Veteran Member uj.forex's Avatar
    ^^
    Spreads are definitely high, but volatility is much higher too as compared to the major pairs.... And as for USD/CAD and Aud/Usd, these are commodity currencies so keeping up with the news regarding commodities is quite necessary to trade them in a better way... Personally, I find Gbp/Usd as the best pair to trade... not that much risky as gbp/jpy and eur/jpy... while still yielding enough daily move....

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