Currency pairs without the US dollar [cross pairs]

What are the so-called cross currency pairs? It's different pairs of crosses. It is extremely easy to distinguish them - they are all those pairs that do not have an American dollar. For example, EUR / GBP, GBP / JPY and the like. Playing on pairs with omitting USD has a lot of advantages - if you are interested in what, then we invite you to read further!

Cross currency pairs

Above is an example of index analysis. Proponents of this particular method (or at least most of the cases known to us) use it to confirm current trends. Regardless of what settings we try - usually the trend is visible first on the price charts, and only then on the indices. When we are dealing with a trend on D1, the indices can answer the question:

"Will the current trend turn into a bigger trend - eg 1000 pips? "

Such trading has some advantages, which mainly include getting rid of the noise caused by the inflow of frequent macroeconomic data, as well as avoiding the influence of frequent and misleading statements by economists, e.g. American Federal Reserve Bank or FOMC. You certainly noticed that the most macroeconomic data and various types of readings comes from the USA. In addition to data for the whole country, they are also published in the United States regional readings e.g. PMI / CPI for Chicago / Michigan / New York. What's more, outside the Euro zone, we can often face sudden fluctuations in exchange rates, which are caused by statements made by economists, especially members of the US central bank.

Different comparison methods can be used - the method of assessing how many pips the course went up or down in a week - from one Sunday candle to another - or in shorter terms, where we compare a dozen H1 or H4 candles, used to be popular at one time. Collecting such data and superimposing it on the chart showed changes in market trends quite quickly. This is somewhat similar to the method some people use, which is currency index observation. For example on the website Forex Ticket You can easily compare currencies with each otherand even put a few currencies of interest on one graph.

A practical approach

Some traders use the method of opening positions after the intersection of index rates of two currencies. Such moves may be worth noting, but only as confirmation of what is happening on the chart. In index charts, crossings of exchange rates signal a change in the strength of two currencies against each other. A few days later after the change in the price chart appears. For this reason, some people use this tool only as a confirmation. Some people try to look for more dynamic changes in the lower intervals of the index charts. There are even special indicators that show the change in the strength of currencies relative to each other.

You can treat the topic of cross as an alternative to the dominant EUR / USD pair, where most of the trade takes place, but on which also ... most people lose. Sometimes a bit bigger spreads they are worth a more peaceful trade, without excessive shocks.

Undoubtedly, for long-term traders, a much more favorable than "torn" chart is a mild, harmonious graph, following the trend, without excessive fluctuations and deviations. The latter are often triggered by macro data and statements by economists / analysts / politicians. Many people recommend here one of the simplest methods of the game, to not excessively complicate your trading. Analysis of price movements, determining simple supports and resistance. Playing crosses is an interesting solution - of course, it will not fully replace dollar pairs, but, for example, when pairs with USD are in consolidation or do not show a clear trend, you can try to compare several currencies to USD and draw a conclusion which of them is the strongest against the dollar and which is the weakest.

Author Comparic.pl