Everyone wants to make a big profit in the currency trading industry. Most rookie traders think that they can earn more money by trading exotic and cross-pairs. But if you stick to the cross and exotic pairs in the market, you will start making silly mistakes. Finding the perfect trade signals in the cross pair is a very tough task. You will never know when the false spike will hit the stop loss. That’s why most smart traders prefer to trade only the major currency pairs. This is not the only reason for which you should trade the major currency pairs. Go through this article as we will highlight the top reasons for which major currency pairs are the best choice for a professional trader.
Price stability
Compared to the price movement of the cross pairs, the major currency pairs are much more stable. You won’t have to deal with too many false spikes or bad trade setups. Moreover, the price movement exhibits clear trade signals which help the retail traders to find the profitable trade signals. On the contrary, if you trade the cross pairs, you have to deal with the choppy state of the market. Finding reliable trade signals in the choppy market condition is a very tough task. And you should not expect to make a big profit in such critical market conditions.
Nature of the trend
When you deal with the major currency pairs, you can easily find the direction of the trend. Navigate here and learn to see the price movement of the major assets. Just by seeing the highs and lows of the market, you should be able to spot the direction of the trend. On the contrary, the highs and lows in cross pairs are not that accurate. It is very hard to find a perfect swing in cross pairs. So, you will not be able to draw the trend line perfectly. Eventually, you will be taking the trades without knowing much about this market.
Spread of the asset
The spread plays an important role in your trade execution process. Some people think spread has nothing to do with the profit factors. But if you take the trades in the lower time frame, the spread becomes a major issue. Usually, the spread is very low in the major currency pairs. On the contrary, the cross-currency pairs have insane spread and it becomes nearly impossible to scalp the market. Even if you try to use a position trading method, you will struggle to cover the pips gap between the bid and ask price. So, chose a major currency pair to minimize your trading cost.
Risk to reward ratio
The trade setups formed in the major currency pairs provide a better risk to reward ratio in the market. If you think you know every bit of detail about this market, you are making a wrong decision. You need to understand the fact, risk-reward ratio factor is one of the prime factors which determines your success rate. If you chose to trade in the cross pairs, you will barely find any good signals. On the contrary, if you try to trade the market in the major pairs, the risk to reward ratio will be much better. So, you will have powerful recovery factors.
Ease the trading process
By learning to trade the major currency pairs, the overall trading process will become much easier. You will also have the unique opportunity to analyze the news factors easily. So, you won’t have to deal with the critical states of the market in the learning stage. You might be thinking that you can also do the same with cross pairs trading strategy. But trust us, it will be a nightmare and you will lose most of your capital.
Be First to Comment