There are reasons why EURUSD is one of the most traded pairs in the forex market. The pair represents two of the largest markets in the world, with millions of traders engaging in active trades whenever the London and New York markets are open.
EURUSD also offers a nice balance between volatility and stability, which means the pair offers plenty of moneymaking opportunities without exposing you to extra risks. Before you start trading EURUSD, however, there are a few important expert tips you need to know first.
The Best Trading Conditions Are Key
When you are trading EURUSD, you want to trade in the best forex trading conditions possible. This means low spread, average leverage, and low minimum order size to keep your trades flexible. This combination is perfect for small and big investors alike.
To get the right forex trading conditions, you have to work with the right forex broker. Fortunately, the best brokers are required to be open about their trading conditions, so choosing the right one to engage is as easy as it gets.
Hantec Markets, for instance, offers a low spread of just 0.2 pip for EURUSD. It doesn’t take a big market move to breakeven. You can also set your leverage at a maximum of 1:500, plus you can trade as little as 0.1 lot. These make entering the market easy.
Push and Pull
Timing is always important in the forex market, and it is even more important when you are trading EURUSD. The pair is most active when the London or New York market is open, so you want to adjust your trading schedule accordingly.
There is this unique dynamic between Euro and US Dollar during the opening time of the two markets. You want to get to know the pattern so that you can capitalize on market movements. When the European session starts, for example, you will see an increase in trading activities.
5:00 GMT is the hour you want to mark. This is when the European session closes. It is also the quietest time for the pair, because traders usually close their positions or place a hold on their orders until the next US session starts.
Big Leaps and Factors That Cause Them
Depending on your trading style, you can aim for an average of 40 to 50 pips a day when trading EURUSD. The pair is known to do big (and extended) rallies and often challenges its resistance and support points several times a day.
News-trading is particularly effective with EURUSD. Political and economic conditions, announcements made by the EU and the Fed, and the way the two markets respond to them usually cause big leaps that allow you to secure more pips.
All you need is to go with the market instead of against it; this is easier said than done. You have to be willing to read updates, pay attention to market changes, and be ready for big announcements if you want to be even more profitable when trading EURUSD.
Pay attention to these tips, however, and things will get easier. You will start recognizing the patterns that the pair produces, you’ll be trading in the best conditions, and you will be able to take advantage of those big leaps to score big pips.