Trading currency pairs with UDOs is quite simple and straightforward, same as with other UDOs types. In order to be successful you simply need to get a basic understanding of technical analysis. It might sound complicated, but in reality it`s not. Technical analysis enables you to see hints that let you make predictions about the future value fluctuations of a currency pair. It consists of following the global economic data and news and making predictions on how the asset will move. Most investors will only focus on a few currencies, even though there are more than 30 pairs that can be traded. We would advise you to do the same and keep your trading focused and simplified. It`s much easier to deal with two or three pairs and follow the economic data for them.
A lot of traders use only technical analysis, but there are also other factors at play that can have an effect on a pair`s value. For example, many traders who use technical analysis will not invest when there are major economic reports due. Even more so if the report is coming from the US. However, it`s always best to keep an eye on the big picture and think long term. Follow the news selectively and think globally, because some events and occurrences might impact only a certain country, but others might impact the whole world and consequently many currency pairs. Here are some reports that we recommend you follow:
- Retail Sales, Inflation Data, Interest Rates by Central Banks, Manufacturing Indices, Housing Reports, Unemployment Data, GDP, Consumer Confidence Reports.
Know however that using only technical analysis and following the economic data might not always be enough and there is some risk, especially if you`re using a bad data source. Make sure to get your news from a reputable source.
Currency pairs are among the most traded UDOs types and are a good starting asset for beginning traders. As everything else, UDOs require devotion and effort and if you want to be good at it you need to look deeper into some more specific strategies and trading tools. As you improve your skills and start getting the hang of predicting future asset movement according to economic data, you will also be able to start using some more complex strategies. Sometimes you might go for different option types such as touch and no-touch and so on. Consequently, this should make your trading more profitable.