How to Choose the Perfect Pair With Your Dollar?
As we all know that forex trading is done by buying the base currency pair and the currency of the comparison. This means we must be able to determine what currency pair appropriate to obtain the desired profit and minimize losses in trading. When we know the characteristics of a currency pair it is an advantage. You can choose the most secure currency pair and stable in the forex market.
There are many currencies that are traded in forex. However, only a few currencies are actively traded in daily frametime sizes with large amounts. Most of these currencies are currencies of developed countries that enter the active ranks of world trade and international banks. From one of these active currencies, the dollar becomes one currency that is quite dominating and often in pairkan with other strong currencies.
When you decide to place a buy or sell on a pair of dollars, all based on consideration of the state of the United States economy. A strong economy will make investors have a perception of security and assumptions of achieving high investment returns. This also increases the capital or capital account and affects the high demand for the dollar by other countries that want to increase the leverage of the deficit generated by the balance sheet of the United States.
Many are the factors why the dollar is very actively traded in the forex market. Some of them are:
- The supply and demand factors
- Sentiment and market psychology
- Technical factors
Currency currency pair category
Based on Range
Daily average movements are the most sought after options by the trader. This is due to an indication of trend direction and price movement. If you are a beginner and are looking for a suitable currency pair, it would be better if you use a pair with a relatively small range. Pair EUR / USD is a pair of dollars that became a favorite of traders because it has an average movement that is still below 150 points.
If you want a more relaxed trading where the daily average movement is less than 70 points, you can use NZD / USD. You can also choose a more extreme way but generate more profit with the daily average movement to reach 200 points using GBP / USD. Lastly, if you feel 200 points is not too extreme, you can choose XAU / USD which is a currency pair for gold trading and other commodities with daily movement reach 2500 points.
Based on Volatility
Currently the market situation makes the pair very difficult in the prediction. This can happen due to many factors. Although unpredictable, there are some people who actually happy with this pair because it is considered to have its own challenge to trade with currency pairs are very high volatility. Some pairs with this high volatility include GBP / USD, GBP / JYP and others. This pair’s volatility moves very quickly compared to other currency pairs, either in short or long positions. Variance of prices displayed on short and long is often uncertain for pair EUR / USD, AUD / USD and USD / CAD which eventually form the trend and override the trend reversal position.
Based on news
All major pairs almost have news to encourage volatility . But some of these pairs EUR, USD, GBP and JPY are the most common and often have news. News 4 currency above always has a great influence. Trading when there is a news from the currency pair can be counted on to gain profit that multiply.
For those of you who are a newbie in the world of trading, choose a currency that can be analyzed before making a transaction. This is because when the movement increases then the volatility will also enlarge. This is where the profit is wide open. One of the strategic steps in optimizing the profit is to choose a pair that can provide great opportunities in obtaining profit. Use range, volatility and news considerations to focus on one of the leading currencies.