UK Forex

How Can a Person Profit From UK Forex Currency Pairs

For most people, the stock market is an intimidating place that they are unfamiliar with. In order to secure one’s financial future, the right investments will have to be made. One of the most pain free ways to put your money into the market and see instant results is by trading CFDs or binary options. A CFD contract is like a option contract. The big diffrence between with CFDs and options is that CFD doesn’t have expirate date and you can use leverage with CFDs. If you want to know more about CFDs then go to this page: CFDs. On that page you will get to know what CFDs are and there is course on how to trade succesfully by using CFDs. A binary option on the other hand is basically betting on whether a stock, commodity or currency will rise or fall in a certain amount of time. Among the most commonly traded items in this market are called currency pairs. Currency pairs group two different currencies from different parts of the world and the traded has to decide whether they will rise or fall. The following is some information on how you can make a good profit from using volatile currency pairs.

Understanding What Volatility Means in the UK Forex Market

Usually, a person has heard the term volatility a lot when it concerns the stocks and bonds market, but are not sure exactly what it means. The term volatility usually relates to the unpredictability factor of a certain market. While most people view the volatility factor as a negative, it can be beneficial in the right situations. In some cases, a person can make a handsome profit when dealing with UK Forex market volatility.

How Can Trading UK Forex Pairs Benefit You?

Now that you understand what volatility is, you are ready to learn how it can be beneficial. The volatility of UK Forex currency pairs means that they will move up and down a lot. The risk you take when betting on these currencies is rewarded by the bigger payouts that usually exist. So simply put, the more you risk when choosing your binary options, the more money you will receive when you are right.

In order to get a handle on which UK Forex currency pairs to put your money in, you will have to find the right tools to measure volatility. One of the biggest and most widely tools out there to measure this type of volatility is Bollinger Bands. By learning how to use the tools at your disposal, you will be able to eliminate some of the risk involved with the currency pairs.

Practice Makes Perfect When Trading UK Forex

At some brokers like Plus500 and Markets.com you can open a demo account for an unlimited time. So you can practise as much as you want.

Once you get into the habit of choosing volatile currency pairs, you will be able to get better at choosing the best ones. The movements of a volatile currency pair is usually very drastic whether going up or down. The more you are able to watch how the different pairs perform, the easier you will find it to pick the best ones to put your money into.

The time and effort that goes into doing research on the UK Forex currency pairs at your disposal will be more than worth it. Getting a few different consultations scheduled is the only way that a person can find out what a professional is able to offer them in regards to Forex advice.

British Pound

 What made my trade profitable in the British Pound?

I started jotting down my answers and realized that simple things really matter. A good day to start a Monday with a hot coffee, news paper ready, and Television on at my favourite “Financial News Channel” Bloomberg. Alone moment in my room seeing my computer ready, charts showing, and my hero’s picture George Soros as my desktop’s background with a quote:

“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring” – George Soros (2006) The Winning Investment Habits of Warren Buffet and George Soros

Ever since I learned about trading and my hero, George Soros, I was hooked up with it ever since, especially the day when Speculators Broke the Pound in September 16, 1992 and then called Black Wednesday. And from there I started replicating and reading books, trading strategies every day and practice on a demo account. I know that trading in the foreign exchange market is highly risky, highly speculative, and highly volatile so I did manage to practice first my patience and to know the feel of the market. And one thing I’ve proven right is that George Soros was correct. It’s pretty fun and awesome! That’s why I wasn’t making money at that time.

But because of my passion for trading and the high interest in the foreign exchange market grew, I decided to open my account and try all the things I’ve learned from the books, videos, and apply the strategies I practice. But I wasn’t making money, I was losing. It is different when money is involved, your hard earned cash from your pay check or savings. It crushes my spirit to the floor whenever I see my stop loss ticked, or lose heavily whenever I didn’t follow my trading plan. Then a friend of mine who is trading stocks told me, that in trading you must pick your poison. Watch it like a sports fan, dream of it like your favourite car, and love it solely like your wife. By the way, I’m married now and she loves the idea that her husband is a Trader.

Anyway, I decided to choose the currency, what my hero broke in the days, and that’s the British  Pound or GBP/USD. The British Pound, Cable, or Quid, is one of the most liquid foreign exchange currency. With a narrow spread it signifies that the currency is highly traded. Nevertheless, the liquidity of the pair is a great choice for a novice currency trader.

1. British Pound held the Reserve Currency for more than a century

Prior to the US Dollar becoming the world’s reserve currency, it was the Pound being used in trade of goods and services. Everything that the US Dollar is now it is the British Pound before, although it is not in its glory days now, it remains an important currency and a popular trading currency for traders due to its narrow spread, where the costs of trading is not high, plus your broker makes little money on this transaction.

2. The United Kingdom’s Economy

In the 18^th century, the United Kingdom was the world’s most powerful nation of its time and its economy is at its peak. The Kingdom dominated international trade, and the British Pound served as the world’s unofficial reserve currency. United Kingdom may have lost its past stature but has emerged as a major centre for global finance now. Its financial sector has become a very important part of the country’s overall economy where the direction and strength of this sector plays a determining role of its economic well being.

3. The Currency that remains outside of the Eurozone

Although the United Kingdom is a member of the European Union, where it enjoys free trade, limited to non-existent trade barriers, and free flow of capital, the country remains outside the European Monetary Union, and maintains its own currency. Which makes it noticeably strong compared to the Euro. With a higher volatility movement compared to the Euro, the British Pound often trade within a wider range through the day with swings ranging 100-150 pips. Although, it is not unusual to see the British Pound move by 20 pips during Tokyo sessions, but in a very volatile environment one could expect massive swings. Hence, the British Pound can be seen as most volatile through London and New York sessions.

To trade profitably one must consider all the things that he or she doesn’t know. And lessons worth sharing are the lessons of experiences, findings, and losses. As they say Traders are not afraid to take losses, to talk about losses because to rebound from losses are our defining moments.

What about you? What makes your trade profitable?