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The Most Useful Trading Tips Of GBP/USD.
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[QUOTE="forum forex, post: 201322, member: 78402"] The GBP/USD, a.k.a. The Cable, is a major currency pair. It is one of the world’s most heavily traded currency pairs, with the ratio indicating how much £1 is worth in USD. When the ratio indicates a growing value, the GBP is appreciating relative to the USD. When the ratio is decreasing, then the GBP is depreciating relative to the USD. The first currency in the pair is known as the base currency – the British pound. The second currency is known as the quote currency, in this case the US dollar. The value of the GBP/USD pair is heavily dependent on a host of factors, each of which needs to be considered in isolation, and as part of the bigger picture. What is the best strategy for trading the GBP/USD? There are a number of successful strategies that can be used to trade GBP/USD. Which one is best is going to depend on current market action (trending vs range-bound) as well as the traders own risk appetite and trading psychology. One useful strategy is to trade breakouts in the pair. This strategy works well for GBP/USD because the pair has the tendency to move very strongly following a breakout. Other traders prefer to focus on news reports and trade the volatility that often follows important announcements from the U.S. and U.K. Here are some important tips of GBP/USD: 1. Trends and Ranges The British economy is heavily integrated with the Eurozone, and also to a large extent with the economy of the U.S.A. This means that over recent years, the currency has tended to not move very far against either the Euro or the U.S. Dollar. Therefore, trend trading these pairs can be hard to do in a profitable way. It is often better to take the lion’s share of profit fairly quickly. Especially regarding the GBP/USD, the pair really tends to range a lot, meaning buying reversals at lows and selling at highs and just holding on until momentum runs out can be a great way to trade. 2. Bank of England Policies The United Kingdom's central bank holds an official meeting once per month, at which they release the latest Bank of England Monetary Policy Summary report. This report outlines all of the reasons as to why members of the central bank have made the decision to either reduce interest rates, boost interest rates, or make no change to the rates at all. 3. Understand the Two Economies For traders to successfully trade in major currency pairs like the GBP/USD, they need to understand how the two economies work. Without getting an economic report of the two countries, it will be challenging to make ideal trading decisions. 4. Influences on GBP/USD Price Movement Several fundamental factors come into play when one is trading on this currency pair. While some traders have weekly charts and price charts to determine their trading. 5. Politics and Elections Political events such as Brexit can trigger huge price movements in a currency. Government elections, especially key elections such as the United States presidential election, can also have a huge impact on the GBP/USD pair. Watch for other government-related changes to impact currency values as well, such as changes to tariffs or laws that impact the exchanging of goods. Best Time To Trade GBPUSD Forex Pair GBP USD is an excellent currency pair for both day trading and swing trading. For one, the average daily range for cable is large enough to take advantage of short-term price trends. The average daily range, or ADR, measures the daily price volatility of the currency pair. The actual time window when the London session and New York session overlap is between 8 AM ET and 12 PM ET. The second best time for executing trades in the GBP USD currency pair is during the opening hour of the London session, which is 3 AM ET to 4 AM ET time window. This is when most of the European markets are trading, and as such, there is a good amount of volume in the pair. [URL deleted] [/QUOTE]
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