Selecting Trending Currency pair for Forex Trading

Majority of the forex traders use technical analysis approach to trade, most of these technical traders want the currency pair to follow the trend, may be up or down. When I say about forex trading there are many currency pairs available for trading. Suppose the trader want the trending currency pair, here is how to find which currencies are trending. For doing so there is a simple trick, it is if major currency pairs like EURUSD, GBPUSD, USDJPY, AUDUSD, USDCAD, USDCHF and NZDUSD are trending then stick to it, if major pairs are range bound then it is always that cross currency pairs are trending strongly, like GBPJPY, EURJPY, EURCHF, EURGBP, AUDJPY, EURAUD, etc. This way you will always find the currency pairs that are trending, no matter what conditions the markets are in.

For example: If GBPUSD is showing range bound moves, then I will check GBPJPY, which must be trending and it will be more feasible to take trade on it. Just see the charts of GBPUSD and GBPJPY below, you will get the difference.

GBPUSD Chart Analysis

GBPJPY Chart Analysis

About Bhaveek Patel

Bhaveek Patel is a technical analyst and investor, his areas of interest includes stock market, forex, gold.


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