Among the Forex currency pairs, JPY, USD, GBP, EUR and AUD are very popular and volatile currencies. But only GBP needs to be careful in that. Since it has a very special price movement among major currencies, even beginners may lose a lot. In addition, the price movement is so big that it is a currency that can lose big or win big. The point is how to catch the flow.
Special price movement
GBP is much more volatile than other currency pairs, so fighting like any other currency pair can be very painful. Unlike other currency pairs, it moves up and down like a roller coaster, so you may feel very scared of price movements. The following is the daily bar of GBP / USD, but as you can see from the wide interval of the vertical axis, the movement up and down is very intense. It’s often about 50 pips, and after a big profit, a full return comes a few minutes later. Therefore, if you are unlucky, you will lose many times.
There are few participants
Although the trading volume is the fourth largest in the world, the movement of GBP tends to have fewer participants in trading compared to USD, EUR and JPY. Therefore, there is a tendency for waves to appear in price movements. Many people call it a speculative currency because it is famous as a currency with no sense of stability. Many traders dare to avoid GBP / JPY, GBP / USD, GBP / AUD, etc. Among them, EUR / GBP tends to be in the range relatively easily, and there is a difference in the tendency of price movements.
Strong correlation with the euro
Since GBP is closely related to the euro area geographically, economically and politically, the EUR tends to be linked to price movements. There are many times when the directions overlap.
Start by getting used to
GBP price movements are special movements not found in other currency pairs, so it is recommended that unfamiliar people start with practice by holding down lots. Since GBP is not a currency for beginners, it can be a big loss if you don’t trade after knowing the habit of price movements.
How to fight in GBP
From here on, the main subject is that the range of price movements is so wide to fight in GBP, so both the stop-loss line and the profit line need to be wider than other currency pairs. If you leave the stop-loss line at about -10 pips from the entry point, there is a high possibility that you will be stopped many times. On the other hand, it also has the potential to aim for a very large price range. You should also aim for profit points. Keep the lot small to set a large loss cut and profit points.
GBP inversion point
The reversal point of GBP, which is subject to volatile prices, tends to be different from other currency pairs. Let’s aim for entry at the point where buying and selling are repeated many times in 30 minutes or 1 hour. Please be careful as there is a high possibility that you will be hit by a 1-minute or 5-minute leg.