What Currency Pairs To Trade?

Are you being patriotic and trading currency from your country of origin? Is that the best way to select the currency pairs to trade? Definitely not.

It is surprising that so many new trades select pairs based on their geographical location. For example an Australian would trade AUD against USD , NZD or even JPY. Someone in Switzerland would be more inclined to trade towards CHF against USD and EUR.  Somehow traders believe that their geographical location gives them an advantage over others regarding certain pairs. How much of it is true?

The criteria of choosing a currency pair should be its liquidity, volume and average trading range. A higher value of all three parameters is most desirable. Based on these criteria our choice of pairs are EUR/USD, GBP/USD, USD/JPY, EUR/JPY, CHF/JPY, USD/CHF and USD/CAD

Another important criteria to consider is Spreads. Spreads varies from session to session and broker to broker.  If you trading in Asian session then you would find that USD/CAD would have higher spreads compared to US session. So if you are a scalper or your profit target is usually small then wider spreads can take a good chunk of your profits. It is wise to monitor the spreads and analyze to see if they fit your trading style in your preferred trading time zone.  You many also perhaps want to consider a commission based broker who offers tighter spreads.

Chris Farnworth is an independent Forex and Commodity trader with many years’ experience under his belt. He travels and works from around the world trading and writing content for various websites and blogs. In his spare time he enjoys scuba diving and surfing.

How To Monitor Active Forex Trades?

Monitoring active trades is not as easy as it sounds. In this article I’ll take you through several ways of doing it effectively:

No matter what trading style you use, it always pays off to watch and monitor your trades once you have placed them. There are several way of doing it and it is up to individual to work out the best method based on his/her personal situation.

Audible Alerts:

If you happen to use MetaTrader then you have a feature of placing audible alerts.  Once set  properly MetaTrader would alert you when the price reaches a certain point, it can be your  Stop Loss or Take Profit level.  To set it up simply press “Ctrl + T” and then select “Alerts” Tab. Right click and select “Create”.  I personally use this feature a lot, it helps me get away from PC and do other things around the house while still trading at the same time.

Expert Advisor:

Unless you are very good at programming I won’t recommend creating your own Expert Advisor for managing trades.  However there is an popular free Expert Advisor called “ManageTP” available on  several forums which works just fine. It helps you to automatically place  Stop Loss and Take Profit levels  and move them as per price action. Simply Google the name you would find the Expert Advisor along with instructions on how to use it.

Multiple Monitors:

While on your desk looking at charts it helps if you have multiple monitors.  You can then place charts on one monitor and work on something else on the other monitor at the same time.  I’ve a setup of 4 x 22” monitors dedicated for trading.

PDA:

Using PDA to monitor trades comes in very handy while on the road. MetaTrader and several other Brokers offer PDA versions of their trading platform. Before buying a new PDA check with your Broker support to see if it is compatible. You can also use a laptop with a wireless internet to do the same.

Do you know more ways of monitoring trades? Feel free to share your ideas.

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