BEST CROSS CURRENCY PAIR EUR/GBPNow the dollar is going through a turbulent time, and EURGBP will help us avoid problems related to the dollar, because the pair does not contain the main world currency.
In addition, after Brexit, new interesting opportunities have opened up, which I will discuss below.
Dollar
Most traders choose to trade pairs in which there is a dollar due to the large liquidity.
Liquidity is a trap for a trader, especially intraday traders, but beginners do not understand this.
This liquidity is created by large players whose goal is to collect your stops and manipulate the market.
Such a market is very difficult to predict and very often your 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 external news and stuffing from the United States.
Cross-pairs, unlike dollar currency instruments, have the following advantages:
A more unambiguous reaction to economic indicators;
Limited (half-day) volatile trading period;
The opportunity to calmly move positions through the night, as pairs react poorly to news from the United States;
EURGBP Cross-pair
The EURGBP cross-pair ranks first among the crosses in terms of transaction volumes. The EU and the UK are connected to each other geographically and politically, until 2020 it was a single union. In 2016, British citizens voted for the option of Britain exit, giving the world a new word "Brexit".
After Brexit, the pair began to grow, giving a good opportunity for earnings. In addition, the EURGBP pair always reacts to problems in 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 UK.
The economic crises of the XXI century have raised the exchange rate of the pair to the same levels, which allows you to build countertrend strategies, as well as to fix profits in the interim.
Best trading time
The most active time of EURGBP trading is from 7 to 16 in London.
A unique feature of EURGBP is a decrease in trading activity during the American session, which is explained by the absence of USD in the instrument.
The day trader can afford not to sit waiting for the release of the Fed minutes and not to increase the stop loss before the publication of the NFP.
How exactly to trade and what strategies to apply?
The pair is characterized by a lower percentage of knocked-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 rule, the movement is most often unidirectional. That is, having opened positions in the right direction, you can safely keep it until the evening or put a take profit.
The tactics of late entry, at about 10 o'clock in London, will help to weed out 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 "like in textbooks". It is unknown how long such a picture will last.
Conclusion
Cross-pairs are special currencies that can give a trader a number of advantages over other instruments. This situation arises because crosses are not interesting to large players, market makers work out technical trading on them without mega-fluctuations in liquidity and "hunting for stops".
In general, EURGBP is a calm pair, suitable for beginners and still providing opportunities for trend trading on D1.
