Monday, January 30, 2012

How Can Forex traders Use Cross Currency Pairs to Have Better Trades


I have briefly introduced what cross currency pairs are and why they present more opportunities for Forex traders to make pips in my previous article; while they can also help traders make better decisions when trading Forex; what does it mean
Let’s say that if a Forex trader sees buy signals in both the currency pairs EUR/USD and AUD/USD, trading which one can bring him make more pips?? Well, when things like this happen, Forex traders can look at the EUR/AUD cross currency pairs on the Forex chart. If the EUR/AUD is trending upwards, it indicates that the EUR is relative stronger than the AUD at this moment. Likewise, a downtrend means that the EUR is relative weaker than the other. That is to say, EUR/USD is the better trade instead of AUD/USD according to EUR’s relative strength against the AUD, and it can bring them more pips.
Traders, I believe the main reason that you participate in the Forex market is you want to make crazy pips, isn’t it? So when you are facing different major pairs and are confused which one to take, why don’t you just do this relative strength analysis?

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