When I was recently asked, “What currency pairs are doing well at the moment in Europe and is it the US Dollar or the Euro?” I gave a very short and non-committal answer, so let me expand on it. I’ll offer a few brief observations to help explain the dynamics of foreign exchange, especially the psychology of investing in currencies.
In general, I prefer the Euro to the Dollar. The Euro trades against a number of currencies, which means that it is vulnerable to currency contagion. It can also be undervalued versus the USD for other reasons as well. Although there are many reasons to trade the Euro, I prefer the EUR/USD as my major international currency pairs. I find that I can earn a good return on a consistent basis from trading this pair.
When I buy the Euro, I am always short-selling the USD. When I short-sell the USD, I am buying the EUR/USD. Therefore, if I sell the EUR, I am also selling the USD.
I find that the Forex market for these two international currency pairs is fundamentally relatively stable. While the EUR/USD might trade down as a result of political and economic events, the EUR/USD does not tend to move by large amounts. This is because the EUR/USD is an International Currency Pair. I believe that the Euro has more long-term potential than the USD, although I do view the long-term potential of the USD as limited.
I will acknowledge that when I trade the EUR/USD, I have the risk of under-trading and I will trade at a loss. However, I view that risk as being somewhat offset by the fact that I am not engaged in a trade where I am trading a long-term position and therefore I will not lose money on a very long-term basis. Anotherway to look at it is that I am trading one currency for one day, while the USD is trading for one year. In my view, that gives me a better opportunity to make a profit on each trade.
I like to choose the EUR/USD as my major international currency pair, although there are plenty of markets in which to trade. I also find that I can also trade the EUR/GBP as well as the GBP/USD and this means that I am also making both currencies viable trades. The EUR/JPY is another market where I trade the GBP/JPY. I also trade the USD/JPY as well as the USD/CHF and the USD/JPY.
The reason I prefer the EUR/USD is that the EUR/USD is a Global Currency Pair. There are many reasons why I like the Euro, but the most important is the fact that I am not engaged in a long-term trade. Even if I were, I would still prefer to trade a Global Currency Pair. That’s one of the reasons why I prefer the EUR/USD.
As a Forex trader, I am interested in looking for good opportunities to take advantage of the Trade Execution. Therefore, I like to trade a lot of currencies. In my view, if I am trading three different currencies, that is a good sign. If I trade three times in a week, then I am getting a lot of trade execution. That is a sign that I am making money by investing in currency pairs.
I like to be a little aggressive when it comes to currencies. For example, I like to trade the EUR/USD and the GBP/USD as well as the USD/CHF. If I am doing well with the EUR/USD and the GBP/USD, I feel like I am doing well with any currency pair that I am trading. I recommend that you trade Forex while using Forex time frames that do not extend beyond about ten to fifteen minutes. The reason I do not like longer time frames is that you are more susceptible to external factors. if you are working with smaller trade volumes. I also like to test trade using larger positions. since I feel like a large position gives me more security.