You are a currency trader. Which currency pairs are the best for trading? Focus on the four major currency pairs EUR/USD, GBP/USD, USD/CHF and USD/JPY. Consider becoming a specialist in USD. Yes, its true! You should become a specialist in trading the greenback. Watch these Flexible Forex Day Trading Risk Shield FREE Video Series by Bill Poulos. Download these Forex Scalping Cheatsheets plus the 10X Scalping System FREE. These forex scalping cheatsheets give five different scalping methods plus the best time to scalp. Download this Magic Breakout Forex Strategy by Tim Trush and Julie Lavrine FREE!
This means that you should study and understand the fundamentals of US Dollar, the US economy and the workings of the Federal Reserve System (FED). Then you have done your homework needed to trade any one of the four major currency pairs as all of them depend on USD.
What do you think; USD will weaken or strengthen in the near and medium term? The only thing you need to determine is your bias for USD before each trade. Off course develop a system that guides you in forming an educated bias. Then apply that bias to the major currency pairs.
One bias, four trades! But each currency pair will react differently to USD. For example, if Euro is also strengthening. The currency pair EUR/USD will move less with USD also strengthening as compared to USD/JPY if JPY is weakening.
Take a look at British Pound (GBP) and the Euro (EUR) both at the same time. You should trade the stronger currency. Find out which of the two currencies is getting stronger. You can find that by taking a look at the EUR/GBP cross charts. If the EUR/GBP cross chart is going down, it means EUR is weakening and GBP is getting stronger. You should choose GBP/USD pair for entering a trade!