In addition, after Brexit new interesting opportunities have opened up, which I will discuss below.
Most traders choose to trade one-dollar pairs because of the high liquidity.
Liquidity is a trap for a trader, especially day traders, but beginners don’t understand this.
This liquidity is created by big players whose goal is to collect their stops and manipulate the market.
Such a market is very difficult to predict and very often their positions will be closed by the stop.
The only way out of this unfavorable situation is to trade cross pairs.
Cross Currency Pairs
There are 8 recognized major currencies of developed countries with stable economies.
The fact that these currency pairs can interact with each other without the mediation of the dollar makes them so attractive and resistant to outside news and US padding.
Cross pairs, unlike dollar instruments, have the following advantages:
A more unequivocal reaction to economic indicators;
Limited volatile trading period (half day);
The opportunity to calmly move positions overnight, as couples react poorly to US news;
EURGBP cross pair
the crossed pair EURGBP ranks first among crosses in terms of transaction volumes. The EU and the UK are connected to each other geographically and politically, until 2022 it was a single union. In 2016, British citizens voted for the option to leave Britain, giving the world a new word “Brexit”.
After Brexit, the pair began to grow, providing a good opportunity for profit. Furthermore, the pair EURGBP always reacts to the problems of the global economy in the same way: with the growth of the euro for the simple reason that the economy of the Union is larger than the economy of the island of the United Kingdom.
The economic crises of the 21st century have raised the exchange rate of the pair to the same levels, which allows building countertrend strategies, as well as fixing gains in the meantime.
The best time to trade
The busiest time for trading EURGBP is from 7 to 16 in London.
A unique feature of EURGBP it is a decline in trading activity during the US session, which is explained by the absence of USD in the instrument.
The day trader can afford not to sit back and wait for the Fed minutes to be released and not raise the stop loss before the NFP is released.
How exactly to trade and what strategies to apply?
The pair is characterized by a lower percentage of knock-out stops, since the price does not make unexpected jumps, unlike the dollar.
Thanks to this, you can trade using classic trend strategies.
As a general rule, the movement is usually unidirectional. That is, having opened positions in the right direction, you can safely hold them until the night or take profit.
Late entry tactics, around 10 o’clock in London, will help eliminate false breakouts.
Daily trends after Brexit
After Brexit, the pair gives very clear and understandable trends. You can even use a simple moving average to open good deals.
The graph is literally “just like in the textbooks”. How long such an image will last is unknown.
Cross pairs are special currencies that can give the trader a number of advantages over other instruments. This situation arises because crossovers are not interesting for big players, market makers make technical trades on them without mega fluctuations in liquidity and “stop hunting”.
Usually, EURGBP it is a quiet pair, suitable for beginners and still providing opportunities for trend trading on D1.