Many retail traders start out either restricting their trading to a few pairs, or trading every instrument they can get their hands on. Some of these include: Avoiding the confusion and stress that can come from trying to day trade many different instruments at once. Most material on the internet is based on these currency pairs. I argue that they are not, and that traders should take a more sophisticated approach: Having to pay a higher spread for minor pairs compared to the majors should not be any obstacle to profitability, provided that trades are held for the medium or long-term.
It is possible to devise perfectly good trading strategies for the pairs that tend to behave less technically. Confusion can be avoided if you know what you are looking for and manage your desk with discipline.
This is not a good way to manage the transition from trading just a few pairs to looking for trades throughout the entire currency universe. Here is a table showing the maximum percentage fluctuation in value by currency pair over the last three calendar years, including to date. The maximum fluctuation is effectively the value of the biggest winning trade you could have made without leverage on that pairs for the year given. The next item of interest is that the big story of the last two years has been the Japanese yen.
Even before the Yen was topping the currency headlines, we can see that during it was still offering better opportunities than anything except the Swiss Franc, which was in a strong uptrend during and One solution could be to risk much less per pip on the Yen pair and crosses, and use much wider stop losses.
If you can do this and catch the beginning of a really big move, there is a lot of potential on the table to take advantage of. It is worth taking a closer look at the claim that the Yen crosses are hard to trade, in spite of their larger directional moves. If these crosses are hard to day trade, why day trade them? If you are going to stick to the majors, do include USD. Finally, you do not have to trade the crosses in the same way as you trade the majors. Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch.
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Report Broker Scams Forex Widgets. Adam Lemon Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. Sign Up Read Review. Free Forex Trading Courses Want to get in-depth lessons and instructional videos from Forex trading experts?
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