For anyone interested in having an exceptional time in trading foreign exchange, the AUD is heartily recommended. It’s considered to be an international reserve foreign exchange currency by the International Monetary Fund and, due to the relatively high interest rates associated with it, can pay you a little bit extra for every 24 hours that you hold a long position. Since most traders consider the AUD to be a “commodity currency”, the pricing patterns of foreign exchange currency pairs related to it bear almost no resemblance to the EUR/USD, GBP/USD, USD/CHF or USD/JPY. The “Aussie” is unique. Longer-term traders might want to think about the AUD/USD; it trends well. “Day traders” might want to try the AUD/JPY; it can be electric. Euro fans can contemplate “day trading” the EUR/AUD, instead. Its weekly chart is sporting a 1-year old “inverse head and shoulders” pattern on it.
One of the most profitable ways to foreign exchange trade the AUD is to go after big economic changes or inflection points. Generally speaking, the AUD trends very well.
The Benefits Of Trading The AUD Through Foreign Exchange
Anyone interested in trading the AUD should concentrate on the AUD/USD, AUD/JPY and EUR/AUD because that’s where the largest, AUD-related trading volumes occur. Usually, the mornings in Sydney see a lot of action in the AUD/USD and the AUD/JPY, while the evenings see the EUR/AUD kick into gear. Trading the AUD/USD and the AUD/JPY is fascinating because of the interaction of these 2 pairs through the USD/JPY. Simply put, when one of the pair is “down”, the other one is usually “up”. The EUR/AUD, on the other hand, is more led by what Europe is thinking (rather than events in Australia). Due to the AUD’s positive interest rate carry situation, going long the EUR/AUD is an excellent “day trading” situation.
Things To Consider Before You Trade The AUD In Foreign Exchange Markets
Technically speaking, the AUD is not considered one of the “majors” (a term usually reserved for the EUR/USD, GBP/USD, USD/CHF or USD/JPY). However, Australia is one of a limited number of countries that has an “AAA” credit rating and the AUD is recognised by the International Monetary Fund as an official international reserve currency (meaning that other countries can use it to store their savings in and not get in trouble). In addition, because the AUD carries with it a relatively high interest rate, going long any AUD-related currency pair (such as the AUD/JPY) produces a little surplus in your account for every 24 hours you hold such a pair. All this means that the AUD is rather unique.
Top Foreign Exchange Market Trading Tips
Specialise; there’s not enough time in the day to be a good trader in “everything”. Get in the habit of only trading on Tuesdays, Wednesdays and Thursdays (when the big flows happen and things really move). Go for the big trends (e. g., the 2013 “inverse head and shoulders” pattern in the EUR/AUD) or flows generated by key inflection points (e. g., the advent of “Likonomics” in China in 2013). Stay away from volatile situations (e. g., the NZD in 2013) and places where the tail wags the dog (e. g., USD/CAD in 2013). Modulate your leverage to fit the perceived volatility of whatever currency pair you’re trading. Never trade more than 5 contracts at once. Always use stop losses.
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