Content Experience Points : +1
Reactive trading and news trading, the strategy based on interpretation and interception of news can sometime be daunting and bleedy.
While it is popular among pips-grabbing enthusiasts, who may have access to the best first-hand macro data or breaking news about the assets they are trading, it may be not always be the best strategy when trading Forex.
If you don’t want to trade pound sterling among the Brexit turmoil.
If you want moderate volatility on strong trends with no prolonged consolidations on relatively high volumes.
If a choppy market trading sideways like EUR/USD drives you crazy.
There is a currency pair that shares these features.
It’s AUD/NZD aka Aussie/Kiwi.
Both currencies are considered risk-on.
This combination helps you avoid situations where a big economical or political event blows-up the strategy you built on the technical analysis.
If you are trading a risk-on currency like the Australian dollar or New Zealand dollar against a risk-off currency that is considered a safe investment in times of high uncertainty, such as Japanese yen, you are prone to unexpected situations.
Trading two risk-on currencies at the same time makes your technical trading strategy more robust.
Both Australia and New Zealand have been able to stay away from global headlines. There’s hardly ever a top breaking news story about these markets.
As for the currency pair itself, it has all the qualities a day trader looks for.
Strong trends are much easier to trade.
Nevertheless, many forex traders choose pairs that are very tricky.
Just take a look at the very popular EUR/USD.
You can see very long periods where the market is undecided and it is very difficult to make money constantly trading this hard-to-spot pair.
Trading EUR/USD can be very tricky.
Sideway trends are not obvious consolidations, so it is even more difficult to implement any trading strategy effectively.
In fact, the castle of cards easily collapses more often than not.
One more advantage of Aussie/Kiwi versus most pairs is the early timezone.
Less agressive participants and slowl but techinically-fit moves.
That’s a thai massage parlour.
Gazillions traders fighting in all directions, exposed to high bi-lateral fundamentals and massive geo-political impact news. That’s the jungle.
If you are trading daily candlesticks from Europe and America, the news that may affect your strategy come very early in the cycle.
AUD NZD is a good pair to test your trading system, since there are not many external events that may blow up your otherwise sound trading strategy.
Pooling perfectly shows a clear bullish trend on all eagle eyes.
This is poetry.