Ikhtisar:Crosses provide forex traders with more trading pairs to choose from, resulting in more trading opportunities.
As you've seen, there are a plethora of trade options in the forex market beyond from predicting what the US dollar will do on any given day.
You now know where to look for them! Here are a few things to keep in mind:
Crosses provide forex traders with more trading pairs to choose from, resulting in more trading opportunities.
On currency crosses, we usually find cleaner trends and ranges than on majors.
Trading currency crosses allows you to profit from interest rate differentials.
Match the strong currencies against the weak ones using your due diligence and expertise.
Don't worry if the pair you want to trade isn't available with your broker. You know how to make a synthetic pair by going long or short on two big pairs at the same time to make a currency cross.
EUR/JPY, EUR/GBP, and EUR/CHF are the most common euro crosses.
The carry trade currencies GBP/JPY, AUD/JPY, and NZD/JPY are appealing because they have the biggest interest rate differentials against the JPY.
Keep an eye out for dramatic price movements and wider spreads when trading esoteric currency crosses.
Even if you only want to trade the majors, currency crosses can assist you pick which pairings to trade because crosses might indicate which currency is stronger.
Keep in mind that currency cross-pair movements can have an impact on the majors.
Last but not least, keep track of the pip value of the cross you're trading. Some crosses will have a pip value that is higher or lower than the majors. This information is useful for your risk assessment.
Check out some of the currency crosses on days when you don't see any possibilities in the big pairings, or if you want to avoid the volatility of a US news event. You never know what you'll come across!
Our Currency Crosses forum is the place to be if you want to talk to other forex traders who also play the crosses.
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