The first aspect of trading revolves around choosing the right currency pair, which has the potential to garner a huge profit or cause devastating loss. Here are the top tips for finding the right currency pair.
- Compare at least seven currency pairs: It is necessary to take an unbiased look at the currencies in the market by keeping at least seven pairs in the chart in front of you along with the one you are partial towards. This means, you can compare which pair is under the most pressure, which ones are moving down, if any one currency is behaving consistently against other countries. Answering these questions beforehand is the key to achieving success in forex trading.
- Perform technical analysis: There is no substitute for making an informed decision based on thorough technical analysis with the help of tools such as no repaint indicator. This narrows down your choice to the best currency pair which is in custom with the stronger trends. Before venturing into the forex trading market, polish off your skills of technical analysis.
- Be informed of global news: If you have a selection of currency pairs you are contemplating of buying, make sure to stay updated on the global news. Listen to the news for any unusual changes in economical, societal and political changes. The market sentiment can play a major risk assessment in the situation on how it will impact the currency, and in return forex trade.
- Pair strong against weak: The best currency pairs are where one of the pair is trending strong against a weaker quote currency. EUR/USD will have a strong uptrend if euro is strengthening whereas the US dollar is declining, impacting the profit margin in the forex trade.