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How do the professional traders trade multiple currency pairs
There are many different types of financial assets in the market which the professional trader’s trade. If you are relatively new in forex trading than its better for you to stick to the major currency pairs in the world. Those currency pairs involved US dollar in it is generally called the major currency pairs but if the currency pairs if formed without the USD in it then we call it a synthetic pair. But how do the professional traders know trade so many currency pairs? The answer is pretty simple, they use the currency abbreviations to trade them. All the professional forex brokers in today’s world use the currency abbreviations while placing the currency pairs in their trading platform so that the traders can easily call them in the short format. It’s true that the novice trader will have some difficulty in learning the currency abbreviations but if they trade the market for at least one month they will be also familiar with this system. In this article, we will discuss how the professional traders trade the multiple currency pairs in the market.
Fundamental analysis: This is one of the most crucial analysis for trading the multiple currency pairs in the market. As a full-time trader you will not always get trading signals in every currency pairs and sometimes you will get more than two reliable signals in different currency pairs. So what should you do in that moment? Most of the novice traders execute their orders in all the pairs but the professional forex traders do the fundamental analysis and find the best possible assets to trade on the market. But before doing the fundamental analysis make sure that you do the technical analysis in the higher time frame since both analyses are required for perfect trade execution in the market.
Currency correlation: Currency correlation is another key element that the professional traders use to trade the multiple assets in the market. Most of the novice traders in the financial market doesn’t know how to do the currency correlation. But if you know how to do the perfect currency co-relation and can properly use them in your trading than the chances of winning the trade is extremely high. For instance, if you find that both EURUSD and GBPUSD is going up in the smart so which pair should you trade? Most of the novice traders will execute in both the pairs but the professional traders will assess the EURGBP pair. Let’s say in the EURGBP pair they found that EURGBP is in the bullish mode so that means EURO is comparatively much stronger that the Great Britain Pound so they execute long orders in the EURUSD pair only.
Fundamental news release: Trading the fundamental news release in the market is another complex task in the forex market. All the professional trader's trades to trade the financial instrument which has major news release in near term future. If you do your technical analysis properly in the market then chances are very high that the fundamental news release will go in favor of you. For instance, if you spot to possible trading opportunity in EURUSD and GBPUSD pair than which pair should you trade? As a trader, you should look at the economic calendar in the market and find out which pair has major news release in the upcoming days. So if the Great Britain pound has important news release then you should trade the GBPUSD pair since the market will exhibit an extreme level of volatility in the GBPUSD pair. But if you are relatively new in forex trading then you shouldn’t be trading prior to the news release in them market since it greatly increases the risk exposure for the untrained professional.
Summary: There are many different methods of trading the financial instrument in the world. In order to remain profitable in the forex market make sure that you execute high-quality trades in the market in favor of the long-term prevailing trend. Always perform the fundamental analysis along with the technical analysis before you execute any orders in the market. If you are relatively new in the forex market than avoid trading the high impact news release even though it provides lucrative profit potential to the traders.
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