How To Identify Currency Pairs To Trade?
In investment every little decision, you make counts. Some of the major details like the instrument you choose and then the actual asset picked all determine the type of returns you take back. When there is a bot like Ethereum Code taking care of the trading process then the decisions would be made on the basis of logic, technical analysis. Human traders use both fundamental and technical analyses. So the bot traders and human traders together make a great pair for trading. The most important step is to pick the right asset or the currency pair in case of forex trading. We would rather call it the ‘most suitable currency pair’ rather than the ‘right currency pair’. The way every trader interprets a currency pair at any given instant differs. So here are a few things to consider to be sure that you pick a pair that is well-suited to your financial goals and to your trading strategy.
Know the direction of the chosen pair
Some traders like to move with the trend while some prefer buying the downtrend. So before you finalize on a currency pair learn the trend that it is currently treading. Market movement direction also plays a crucial role in this case.
Compare the charts of the most popular pairs
There would always be the top favorite pairs in any market. Pick from the most popular ones in order to safely stick with the crowd opinion. And then compare the charts to get the basic idea before you read any recent updates about the pair. This is an easier approach for the beginners in forex trading who still do not have any favorites.
Choose the apt indicators
The technical indicators you use for one market might not work the same way for another market. So pick the most used indicators in the chosen market. Know the weight to assign to each of the computed results. A combination of the interpretations would then help you pick the currency pair and also get an idea about the price movements that are likely to occur in future.
It is alright to go against the social signals
There are some cases where your instincts might tell something that is totally contrary to the common opinion. As long as you have done the technical analysis and understood the long-term impact of any price change and as long as you have a plan to manage the risks, it is alright to go against the market views.