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The next commodity Fx pair that we will look at is NZDUSD as part of our series on the characteristics of price action of the major Forex pairs. Characteristics of NZDUSDThe closest cousin of the AUDUSD pair, NZDUSD is highly correlated with AUDUSD. Its trading characteristics and the behavior of price action on NZDUSD are therefore very similar to the ones seen on the charts of AUDUSD. The price generally moves in orderly steps especially on the larger timeframes such as 4-hour, daily and higher, although fake breakouts can occur from time to time. NZDUSD most of the time trades in a swingy fashion. That is the price tends to move in swings which is probably what makes the pair very well suited for swing trading. The quite often and frequent formation of trendlines and channels further strengthens the swing trading characteristics of the NZDUSD major pair, but also of other NZD pairs too.  NZDUSD often trades in swings, forming trendlines and channels in the process - NZDUSD 4-hour chart
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Every currency pair in Fx has a unique character. GBP is famously known among Forex traders as the most volatile major currency, and normally, most of the GBP Fx pairs are highly volatile, including the most popular one - GBPUSD. As a result, different trading strategies have been created purely based on this volatility of the Pound, a notable example being the London open breakout strategy. A little bit about GBPUSDGBPUSD usually exhibits very trending price action that is very specific to this pair only. When a trend starts on “Cable”, the price can travel great distances without much looking back or pausing. Trends are also often thrusting with tall candles followed by tight consolidation. Sometimes retracements are also volatile, with tall candles in the opposite direction of the trend. But, nonetheless GBPUSD trends don’t stop easily, and such retracements don’t last very long before the predominant trend continues and catches momentum traders on the wrong side of the market. All of the above suggests that we should probably be using a different set of indicators in a slightly different way when trading different currency pairs. For example, chart patterns are often disrupted on GBPUSD due to the volatility. The structures are often in an irregular shape and it is not uncommon for GBPUSD chart patterns to fail miserably. So trading reversals such as trying to pick top and bottoms can be very tricky and is not the best way to trade this pair. Using trending strategies on GBPUSD, however, tends to work much better. In this article, we’ll focus on this aspect of trading the GBPUSD currency pair.  GBPUSD 4-hour chart - Once started, trends can often accelerate instead of reversing on the GBPUSD pair This is a powerful trading strategy that works very well during strong market trends and can offer excellent rewards. Most importantly, due to the accuracy of the indicators used and the conditions under which they are used, this strategy enables traders to enter only the best and strongest Forex trends out of which the best trading opportunities are filtered out and considered for taking a trade. It may not generate as many trades as other strategies, but trades which are generated are with a higher degree of accuracy. It’s easy to implement and to use this strategy. It doesn’t require expert knowledge of the markets or extensive understanding of technical analysis principles. The strategy can be applied on all currency pairs with pretty much the same performance/results. It also works well on different timeframes, but the 4-hour chart has shown the most profitable results. On the chart below, we show a real Forex example of how this strategy based on the FxTR Improved RSI indicator and two EMAs looks on the charts:  The entry is at the vertical line on the left, while the exit is at the vertical line on the right (yellow MA starts to slope upwards) - A short trade example that resulted in a profit of over 300 pips on the CHFJPY 4h chart |
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High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Any opinions, news, research, predictions, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Contact us | About us | Guest blogging | Terms of Service | Privacy Policy | Advertise