Major Currency Pairs Personalities.

The seven most liquid pairs are traded against the US dollar with the first four pairs being the majors, followed by three commodity pairs. Other currency pairs are better known as the currency crosses, most popular crosses are those that include the euro, they are EUR/JPY, EUR/GBP and EUR/CHF.

The major currency pairs are:

EUR/USD
USD/JPY
USD/CHF
GBP/USD

The commodity currency pairs are:

AUD/USD
NZD/USD
USD/CAD



Major Currency Pairs Personalities

EUR/USD

The most recent Bank for International Settlements (BIS) survey shows that the most traded major currency pair is the EUR/USD with 28% of total daily volume. The EUR/USD is great for new currency traders since it slow movement compared to the other major pairs. The EUR/USD tends to be negatively correlated to the USD/CHF and positively to the GBP/USD. (see weekly charts)



Characteristics

Average broker spread: 2-3 pips
Daily range average : 90-100 pips
Best time to trade: Euro Session (0700 GMT - 1700 GMT)
Some factors affecting the EUR/USD rate:

• The interest rate differential between the European Bank(ECB) and the Federal Reserve(FED)
• Dollar strongness drives EUR/USD lower
• FED intervention to weaken the dollar the sends EUR/USD higher

Trading the EUR/USD

Trading Experience: New and Advanced currency traders
Trading Style: Day trading and Swing trading

How to trade?

1) Applying Technical Analysis and/or Analyzing Fundamental News from the Euro and US zone to make EUR/USD trading decisions. Breaking strong psychological levels (1.3000, 1.2000,..) and/or surprising economic news releases can make the EUR/USD move a lot in one direction without much retracements.

2) Since the EUR/USD pair tends to be negatively correlated to the USD/CHF, it is always a good idea to compare both EUR/USD and USD/CHF charts in order to predict future moves, if USD/CHF breaks above an important resistance level and EUR/USD didn't break support level yet, the EUR/USD is very likely to break below support level. This also illustrates how USD/CHF tends to lead the move ahead of EUR/USD.
USD/JPY

The most recent Bank for International Settlements (BIS) survey shows that the USD/JPY with 17% of total daily volume is the second most traded major currency pair.



Characteristics

Average broker spread: 2-4 pips
Daily range average : 80-90 pips
Best time to trade: Asian Session (2400 GMT - 0900 GMT)
Some factors affecting the USD/JPY rate:

• The interest rate differential between the Bank of Japan(BoJ) and the Federal Reserve
• Japanese government intervention to strongen their currency sends USD/JPY lower

Trading the USD/JPY

Trading Experience: New and Advanced currency traders
Trading Style: Day trading and Swing trading

How to trade?

Applying Technical Analysis and/or Analyzing Fundamental News from the Asian zone to make USD/JPY trading decisions. Breakouts are often true and sustained ones.

GBP/USD

The most recent Bank for International Settlements(BIS) survey shows that the GBP/USD with 14% of total daily volume is the third most traded major currency pair. The GBP/USD is one of the most volatile currency pairs generating many false breakouts and wild movements, therefore, it is not recommend to start trading this pair unless you are a very experienced currency trader.



Characteristics

Average broker spread: 4-5 pips
Daily range average : 150-200 pips
Best time to trade: Euro Session (0700 GMT - 1700 GMT)
Some factors affecting the GBP/USD rate:

• The interest rate differential between the Bank of England(BoE) and the Federal Reserve
• High yield and attractive growth in the UK drives GBP/USD higher

Trading the GBP/USD

Trading Experience: Expert currency traders
Trading Style: Day trading and Swing trading

How to trade?

Applying Technical Analysis and/or Analyzing Fundamental News from the UK and US zone to make GBP/USD trading decisions. Watch out for false break outs! Surprising economic news releases can make the GBP/USD move a lot in one direction without much retracements.

USD/CHF

The most recent Bank for International Settlements (BIS) survey shows that the USD/CHF with 4% of total daily volume is the least liquid traded major currency pair. The USD/CHF tends to be negatively correlated to the EUR/USD.



Characteristics

Average broker spread: 4-5 pips
Daily range average : 120-135 pips
Best time to trade: Euro Session (0700 GMT - 1700 GMT)
Factors affecting the USD/CHF rate:

• Global stability and global recovery will send USD/CHF higher
• USD/CHF rallies on geopolitical instability

Trading the USD/CHF

Trading Experience: Moderate and Advanced currency traders
Trading Style: Day trading and Swing trading

How to trade?

1) Applying Technical Analysis Analyzing Fundamental News from the CHF and US zone to make USD/CHF trading decisions.

2) Since the USD/CHF pair tends to be negatively correlated to the EUR/USD, it is always a good idea to compare both EUR/USD and USD/CHF charts in order to predict future moves, if EUR/USD breaks above an important resistance level and USD/CHF didn't break support level yet, the USD/CHF is very likely to break below support level. This also illustrates how EUR/USD tends to lead the move ahead of USD/CHF.

10 Advanced Tips For Trading Success!

Trading the Forex market can be tremendously exciting and rewarding but that doesn't mean that starting out can't be nerve wracking and at times frustrating. That's why eToro offers you these 10 top tips to help you trade:

1. Get Your Feet Wet Gradually. Most new traders start by opening many trades and then find it hard to monitor them all. By focusing on just a very few trades in the beginning you'll give yourself the opportunity to keep track of your trades, and to figure out how to adjust your trading approach according to market movements.

2. Stop Forgetting Your Stop-Loss! The key cause of unsuccessful trading is excessive losses and the single biggest cause of losses is incorrect portfolio management. Remember that a Stop Loss is not there for decoration, it is there to prevent your losses from mounting up. Use it wisely and you will soon see your loss rate reducing!

3. Build A Trading Plan/System. Every trader develops their own individual trading system, depending on the amount of time they dedicate to trading. Traders with more time may adopt a day trading strategy, while others might prefer longer term positions. The important thing is that, whichever trading style you adopt, you stick to your trading plan. Many new traders who experience losses find themselves tempted to switch approaches, however one or two losing trades don’t necessarily mean that your trading system isn’t going to be a profitable one.
4. Don't Cut Your Profits Short. The number one mistake new traders tend to make is closing their winning trades too early. By sticking to your trading plan you can learn to avoid making hasty exits that reduce your potential profits.
5. Don’t turn Profitable trades Into Losing Ones. Once the market is going your way and your positions show a profit, keep a close watch on them. Move your stop loss forward to your entry point to secure your investment. Then keep moving your stop loss forwards in the direction of the trend to secure your profits and prevent your trade from slipping back into a loss.
6. Beware Of “Scaling In”. Scaling in is a strategy where an investor increases his position size when the position is negative, hoping that it will retrace back and close all the positions in profit. Using a Scaling in strategy isn’t necessarily a bad thing but it can quickly wipe out your account if you don’t know how to use the strategy correctly. As such it can be a risky approach for a beginner trader.
7. Plan Ahead. Never enter a trade because the price is suddenly rising or decreasing. Always plan your trades in advance. Know your desired entry point, Take Profit and Stop Loss rates before you trade and wait for the right opportunity to arise.
8. Preserve Your Capital. Profits are there for the making, but the real key to lasting Forex achievement is not just to make profits, but to keep them. Letting profitable trades run, cutting your losses quickly and keeping cool under pressure and in line with your trading plan is you key to profitability not for a single trade but across all the trades you make.
9. Trends Carry Momentum. New Traders are often unaware that as a new trend starts to build its momentum tends to increase. Additional traders will tend to jump on board an emerging trend, strengthening it as it continues to develop. Try to trade with the market’s momentum on your side, as it will often push your trades in the right direction, hitting your profit targets sooner than you might expect.
10. Don't Waste Your Time On A Losing Trade. If you find yourself in a losing position, remember that it is better to save your energy, cut your losses and move on to the next trade. The Forex market is full of profitable opportunities, just waiting to be exploited, so don’t waste your time on an unprofitable trade!

These 10 trading tips can help you achieve positive results in your Forex trading activity.

Successful trading,