Some Tips for Trading the EUR/USD currency pair in the forex market
Euro and the USD are the official currencies of European Union and the United States – the two largest economies in the world.
Therefore, the importance of this currency pair is paramount. Most forex traders like trading the EUR/USD pair, and earn loads of money or lose a lot.
The most common tips to follow while trading the EUR/USD pair are:
However, most of the transactions regarding the EUR/USD pair take place between 8 a.m. to 12 p.m. EST, since both the U.S. and the European markets remain open during this period.
Therefore, prices remain extremely volatile, and that can be utilized to maximize your profits.
The Importance of Asian Session Most forex traders consider the Asian trading hours to be off-hours.
However, recent studies show that a majority of traders, as a result of failing to understand the market sentiment and price action movements, lose money during highly volatile European-American sessions.
Meanwhile, the markets remain relatively calm, and the prices range between the support and resistance levels during the Asian trading sessions.
Therefore, novice traders should utilize this and mitigate their losses.
Use Wider Stops The high volatility of the EUR/USD pair leads to erratic moves in several cases, and trigger the stops placed by you within a short amount of time. However, in most of these cases, the market bounces back, and moves in the opposite direction.
Therefore, you should use wider stops while trading EUR/USD pair only in order to give the trend to play it out. Don’t Be Greedy You should always close the position when the EUR/USD pair reaches a certain price target.
The pair is highly volatile and may turn around, and leave you with a loss, if you don’t close your position at the right time, expecting to win more.
You may close half of your position, and move your stop to breakeven point, so that you’ll profit in any case.
This is called a free trade, and is extremely useful to avoid losses.