Unlike its leading partners, Euro (EUR) traders tend to speculate on the currency’s movement based on the power of the Eurozone economy. As you must know, the Euro and the U.S. dollar (USD) pair is, globally, the most liquid and traded Forex pair and this is why most of the Forex trading bonuses are given in USD or EUR. Its liquidity is so high due to in constant movement, while this happens on a limited price range, the chances of making money are endless if you learn to read the pair properly.
There are several trading methods you can use with the EUR/USD pair. If you are a looking for reliable; easy to understand and apply tactics, we hope to please you by the end of this article. All types of forex traders, regardless of their skill level, can use these tactics. They were made to help new traders decrease their position scope and regulate risks. The following strategies will support proficient traders as well to increase their scope, providing support towards getting a wider access to market benefits.
Equity traders as well as Forex trading bonus masters can also use these strategies with CurrencyShares Euro Currency Trust (FXE), a grantor trust that traces all the Euro value variations in compliance with the U.S. dollar in real time. For its part, ProShares Ultra Euro (ULE) gives long exposure; however, its trading range is quite low, with an average trade of just 24,283 daily shares. On the other hand, ProShares UltraShort Euro (EUO) offers the same leverage to short sellers with higher liquidity, with an average of more than 700,000 shares per day.
It is usual for this pair to both increase and decrease between a certain barrier and then become inactive for a while, entering a narrow range pattern. This pattern will allow you to protect yourself from a major reversal while setting your stop loss on a close price. Fortunately, this interface sends a strong signal when it identifies a possible breakout or breakdown tendency coming. By using this strategy on your next Forex trading bonus, the interface will automatically fit the position into the thin range price bars that we created.
With this potent, but modest pattern, you can forecast how the price will grow in the event of a substantial breakout or breakdown. In addition to this, you won’t be exposing yourself to big risks, which is an attractive quality for a big amount of traders. This strategy was discovered and developed back in the 1950’s in the US.
Currency pairs tend to go back and forth inside restricted limits for long periods, this allows us to set up clear trading choices that will produce new trades and profits if done properly. Keeping calm during these merging stages, at the end, will usually be worth it, although calm and leaving a train before it crashes can be mistaken. When the support or resistance levels are broken, they generate low-risk trade entries that can lead to earning a great profit.
If you want to get and take advantage of this tactic benefits, a good sense of timing is definitely a key element. By stepping in too early, you could cause a reversal; If, on the contrary, you get into it too late, your trade will also have a high chance of turning into losses. A preventive trick for this is to cut the timing risk, while opening a partial position when the pair starts or finishes and then insert it into the initial smaller retracement.
Although the EUR/USD movement goes in both directions, you have to keep in mind that this fast movements normally vanish out when the supply/demand equation changes, as the transfer price varies from one level to the other in a constructive cycle. This usually tricks latecomers to set positions they believe would regulate losses when the currency pair is actually heading the opposite direction.
With the pullback strategy, you can make the most of this countertrend movement. You only have to recognize important support or resistance levels that can end the price fluctuations and reestablish the initial trend direction. These levels are normally generated by past highs or lows and key levels outlined by Fibonacci retracements. The pullback strategy can be one of the most effective when applied correctly.
In conclusion, as you can see, both Forex trading bonus newcomers and experienced Euro traders can follow this proven to be useful tactics to take advantage of these price action option that Euros have to offer, and before start applying theme we encourage to investigate them further.