Trading EURUSD is quite safe currency trading as EURUSD pair has the highest daily trading volume compared to other currency pairs in foreign exchange market. Many people love to trade the pair moreover most of forex brokers offer low spread for EURUSD trading. It means the market of EURUSD is very liquid and the balance of power involved in the market is almost equal. So we can see EURUSD is volatile but not too wild as we can experience in, for instance, indices trading.
EURUSD pair offers high probability trading every day and if you observe your EURUSD chart thoroughly you can see several good trading EURUSD opportunities in a day. This is an interesting fact as you can discover the risk involved in trading EURUSD is somewhat low compared to some other currency pairs, as long as you keep holding on your trading plan and trading strategy strongly.
To help you attain better trading EURUSD result, as a good trader you also have to know some factors which affect your trading EURUSD performance. Here are some factors that you should always remember:
Every economic and political news and data on Euro Zone and United States certainly has significant influence to EURUSD pair’s movement in foreign exchange market. News and data such as ECB monetary policy, Germany industrial reports, FOMC reports, US Non Farm Payroll report and any other related news will move EURUSD pair accordingly. As a matter a fact disasters and terror attacks will also affect it even these things seldom take place.
Timing is almost everything in the world of trading. You will have a better result in trading EURUSD when you are skillful to time your trade. You should always pay attention to European, UK and USA trading hours and overlapping trading hours of some regional markets. These precious moments provide you high probability trading opportunities. If you can’t find the right time to trade EURUSD, you’ll desperately watch your EURUSD position trapped in very narrow range market.
EURUSD Cross Rates Factor
Many novice traders do not realize that cross rate of EURUSD will influence their EURUSD trading performance. Therefore always notice what is happening in EURUSD cross rates even if you are solely trading EURUSD. For example, when EURGBP and EURJPY are in downtrend and at the same time you buy EURUSD pair then you will need longer time to make profit in your trading EURUSD position. Even most of the time cross rates give small impact to major currency pairs but for the sake of good timing, paying attention to cross rate pairs will be useful for you.
Building a profitable Forex trading strategy can be boiled down to two key factors – knowledge and testing.
The bottom line is if you have a perfect understanding of the Interest rates movements and FED’s activities and also have a good grasp on your technical analysis then trading EURUSD is for you.If you have a deficiency in any one of this domains the EURUSD will frustrate you because of its riskiness and its tendency to range.