British Pound is getting a lot of coverage in this blog. Reason is very simple - I trade it extensively. Pound is one of the most volatile currencies around, so virtually all its crosses show very big price movements. This creates opportunities for sizeable and quick profits, which attracts traders seeking above average gains, speculators and pure gamblers. I feel obligated to mention that losses tend to be as great, a double edged sword, if you will.
All of the liquid GBP pairs are traded here. GBP-JPY gets the most coverage, but even the more exotic crosses are featured from time to time. Just a week ago Pound was the focus of whole bunch of trades with good results. Crosses included GBP-CAD and GBP-NZD. They are not traded very actively, but rather selectively, when I deem probability for positive outcome to be above average. Besides, they are expensive to trade, with large spreads. It might not make difference for 1-2 trades, but over time it adds up, so careful selection of set ups is even more important here than some other trading instruments.
Another one of Pound pairs falling into that category is GBP-AUD. Few months ago in a post Strange chart I covered a possible long term buy. It never materialized, price kept falling without touching the buy level. In fact, price drifted below 2.0000 and approached an all time low from about 14 years ago. Pace of AUD advance started to slow down few weeks ago and now the market has characteristics of being in early stage of major reversal.
(continue on
FXMadness)
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06-20-09, 05:11 PM
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