Characteristics of Currency Pairs
Hey Guys!
Here are some characteristics of currency pairs that I noticed over the years. Perhaps it'll help you find the pairs that best fit your trading style, or perhaps you can use this information as an add-on to your current strategy.
Gbp/Usd - Tends to overshoot key levels.
- Can use to get better risk/reward. Both on entries and targets.
- Can expect many fake breakouts; where key higher time frame levels may be broken on the lower time frames but fail to break out on the higher time frames.
Eur/Usd- Tends to accurately respond to key levels.
- Can be used for tight stop loss placements for there is no need to add a couple pips for wiggle room on this pair.
- Especially on this pair, remember to enter/exit without being greedy or scared. Due to the response accuracy at key levels, price will not give you a second chance to enter a trade or take profits.
Usd/Jpy-Tends to have huge moves without price confirmation.In other words, price gets forced up or down by a higher power for months at a time.
- Can use to ultimately enter counter the initial direction of the forced move; expecting price to return to fair value.
- Can use this characteristic to ride this forced move while not requiring price confirmation for your entry.
Usd/Chf- Tends to have false break outs.
- Especially on this pair, remember to watch the lower time frame's price action to make sure the break out is legitimate.
Eur/Jpy, Aud/Jpy, Gbp/Jpy tend to form trade set ups simultaneously.
- If you notice a strong move occuring on the eur/jpy, pay attention to the aud/jpy and gbp/jpy for possible trade opportunities and visa versa.
That's it!
I hope this helps!
Ken
Here are some characteristics of currency pairs that I noticed over the years. Perhaps it'll help you find the pairs that best fit your trading style, or perhaps you can use this information as an add-on to your current strategy.
Gbp/Usd - Tends to overshoot key levels.
- Can use to get better risk/reward. Both on entries and targets.
- Can expect many fake breakouts; where key higher time frame levels may be broken on the lower time frames but fail to break out on the higher time frames.
Eur/Usd- Tends to accurately respond to key levels.
- Can be used for tight stop loss placements for there is no need to add a couple pips for wiggle room on this pair.
- Especially on this pair, remember to enter/exit without being greedy or scared. Due to the response accuracy at key levels, price will not give you a second chance to enter a trade or take profits.
Usd/Jpy-Tends to have huge moves without price confirmation.In other words, price gets forced up or down by a higher power for months at a time.
- Can use to ultimately enter counter the initial direction of the forced move; expecting price to return to fair value.
- Can use this characteristic to ride this forced move while not requiring price confirmation for your entry.
Usd/Chf- Tends to have false break outs.
- Especially on this pair, remember to watch the lower time frame's price action to make sure the break out is legitimate.
Eur/Jpy, Aud/Jpy, Gbp/Jpy tend to form trade set ups simultaneously.
- If you notice a strong move occuring on the eur/jpy, pay attention to the aud/jpy and gbp/jpy for possible trade opportunities and visa versa.
That's it!
I hope this helps!
Ken
Forex Trader/Forex Trading Education/Weekly Forex Forecasts and Midweek Forex Analysis