Different Trading Strategies to Trade Euro

In Forex market, all the currencies are being traded. However some currencies are traded more frequently. Euro is the second most actively traded currency in Forex market. Euro is the currency of the European Nations. The most liquid pair of currencies being traded on the Forex is EUR/USD. Euro is one half of this pair. Similarly it is also included in the most favored Minor pair of currency being traded in Forex. It is also included in G10 currencies as well. All these facts reflect the strength of Euro. The traders all over the world are trading in Euro.

Strategies:

There are many strategies to earn profit in trade of EUR/USD pair. However there are three strategies that have been proven beneficial and profitable in this regard. You can use them to earn heaps of profit with the trade of this most traded pair. These strategies are risk management techniques. These strategies are:

  1. Pullback:

A brief andtemporary drop in commodities chart in a continuous trend is called Pullback. It is mostly applied and used in case of pricing drops of short term. It is considered as a buying opportunity for the traders after a currency has enjoyed increasing price status. Such a pullback is a positive signal that the rate of the currency is again going to rise. The rate of EUR/USD shuffles greatly in both directions. The pullback strategy is the most applied to maintain demand and supply of EUR/USD pair.

  1. Breakout and Breakdown:

A timely decision is essential for this technique. This pair sets certain ranges for beneficial and profitable trade. Such ranges ultimately fix new trends of trade. Buy the breakout and sell the breakdown is another useful strategy to deal with EUR/USD. You should decide carefully while using this strategy. If you make a deal too early, it will result in reversal. If you wait too longer, it will be a risky investment. Thus it is profitable to minimize the timing risk. You can do it by deciding a partial position in case of break out or break down of the currency pair.

  1. Narrow Range Patterns:

It is another important strategy to deal with the EUR/USD pair. A trading range occurs if a currency is traded between too high or too low rates for a certain duration of time. The top range offers resistance against price increase while the lower range offers support for price. This strategy predicts that EUR/USD’s price bars will increase for breakout or breakdown. The rate of this pair changes and shuffles into prominent barriers and then it stays still, ultimately prints narrow range pricing bars. It reduces risk in the investment.

Thus the trader can use three techniques to earn profit in the trade of EUR/USD.

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Yasmine Ahmed