In FX trading, the pound-dollar pair has a higher volatility than the euro-dollar pair, so scalping techniques are a little more difficult. This is simple, because currency pairs involving the pound tend to have volatile price movements. If you want to scalp with the pound-dollar pair, be sure to pay attention to the following points.
Features of Pound Dollar
The GBP/USD is slightly more difficult to scalp than the EUR/USD. There are the following reasons. It is said to be more difficult to master than the USD or EUR, making it difficult to do it full-time. Many people are forced to cut their losses due to the volatility, and losses can be large depending on the time of day. There are also opportunities in investing, so judgment is important. You need to create rules depending on the situation, look at the direction of your position, and get results quickly. Avoid 1-minute averaging, as it is dangerous.
3rd place in the world by trading volume
EURUSD is the world’s most popular and traded currency pair along with GBPUSD and USDJPY. Since the pound-dollar has a very large trading volume, compared to the pound-yen and pound-Australian dollar, price fluctuations are very easy to stabilize. The pound is called a speculative currency, and trends are likely to occur. Therefore, price movements are stable.
More volatile than the Eurodollar
In the case of the pound-dollar, the price movement is much more volatile than the euro-dollar, so it may not be very suitable for beginners. It is a monthly chart from 1970 to 2023, but it fluctuates from 1.2 to 2.6.
Source : Tradingview
On the other hand, the EURUSD is 0.6 to 1.6, so you can see that the fluctuation range is smaller than the GBPUSD. Therefore, if you want to trade safely, EURUSD is better.
Source : Tradingview
Asian time doesn’t work
The pound dollar does not move on Asian time. It’s a pound/US dollar pair, so there’s no reason to move to Asian time. The main event runs from the London market to the New York market. Policy interest rates, unemployment, and even political events can cause cataclysms. Therefore, please note that the quality of price movements is completely different between Asian time and European time.
Is pound dollar suitable for scalping?
It is said that the pound dollar is suitable for scalping. The reason is as follows.
less likely to trend
The pound dollar is hard to create a trend. This is because, as explained above, the pound-dollar has a very large trading volume, so if it moves unilaterally, it will have a large repulsive effect and the supporting force will move easily. For that reason, you can expect stable price movements without trending, so it is a currency pair that is very suitable for scalping loads. However, compared to the Eurodollar, the price movement is a little rougher, so it is not suitable for beginners. It is recommended to trade after getting used to it a little.
Difference between pound yen and pound dollar
While the pound-yen is popular among Japanese individual traders, it is a minor currency for hedge funds and real demand trading, so the trading volume is small, so trends are very likely to occur, and a trend following strategy is more suitable than scalping. This is because you can aim for a large price range due to the occurrence of a large trend. On the other hand, the pound dollar tends to be more stable due to its high trading volume.
Asian time is the aim
Pound Dollar has a lot of trading volume, but that’s after European time. It’s very quiet in Asian time, mostly on the range. Low volatility and directionless price movements continue until the end of the Tokyo market. Asia time is recommended if you are aiming for a price range of about 10 pips. Of course, we do not recommend trading unless the market has a clear highest and lowest price. Because the entry point is unreadable.
narrow spreads
EURUSD, USDJPY and GBPUSD have very narrow spreads. In most cases, the difference between the buying price and the selling price is within 1.0 pips, which is very suitable for scalping. Scalping is often settled in a few seconds after entry, so the narrow spread is the most important.
scalping entry timing
Scalping entry timing can increase the winning rate because you can fight safely by suppressing the following points.
range market
Let’s look at the daily, 4-hour, and 8-hour timeframes. The point is whether the market is in a range. If the market is trending, you should stop scalping and follow the trend. Please check the range market as much as possible on a long-term chart. In the case of short-term legs, it is because it is easy to cheat. Also, as explained above, Asian time tends to be ranged, and European time tends to trend, so be careful.
entry timing
The entry timing is to sell at the highest price and buy at the lowest price. If you break this highest and lowest price, there is a high possibility that it will become a trend, so don’t endure it and cut the loss. This is because in many cases it means the end of the range market. If you get a profit of about 10 pips, you should take a profit. This is because there is a high probability that the pound dollar will come back if you go.
Source : Tradingview
Exness is for scalping
Exness is for scalping. This is because the spread is extremely narrow. Therefore, if you like scalping, please register with Exness and start trading. Since opening an account is free, please refer to the following article to open an account.
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