The US dollar is the only currency that has a global reserve currency status. It’s also the most popular trading asset in the Forex market. Speaking of the Forex market. All currency pairs that include the US dollar are put into a separate group and are called “Majors” (major currency pairs).
The dollar has always meant stability, especially in the major currency pairs. Thanks to this feature, traders can make high-quality forecasts for the dollar and pairs that include it. Also, the American currency has received a special place in the Forex industry because it’s being used as a settlement currency. Most brokers prefer to display trades and their results in US dollars, as well as to perform all deposit and withdrawal transactions for their clients.
How to analyze the US dollar correctly
Being the “world currency”, the US dollar is highly volatile (it’s what makes trading profitable) and a liquid asset, which is very important for traders. It should be noted that high volatility indicates not only greater profitability, but also greater risks. To trade the US dollar successfully, one should be able to read and analyze its behavior correctly.
To conduct an effective analysis of the asset’s rate, a trader needs to use an online trading chart, which reflects the exchange rate fluctuations in real-time, as well as the history of the dollar’s movement over time, that can be viewed on various timeframes.
It is also important to track events that can affect the economic situation in the United States, and, consequently, the behavior of the national currency. The trader should carefully monitor the so-called fundamental indicators that are related to US monetary policy, social factors, etc. All these and many other points must be taken into account when conducting an analysis.
Don’t forget to monitor the behavior of dollar-denominated trading instruments, in particular gold and oil. The correlation between the US dollar and both of these assets is negative, which means that the prices of these assets and the US dollar move in opposite directions. Staying updated on significant events in the US and gold/oil trends will allow the trader to eliminate false signals and assess the market situation from the right angle, thus making a more accurate forecast.
When trading the US dollar, it would be smart to take into account everything that may affect its value. By following this recommendation, the trader will be able to fully unleash his trading potential and get the most of trading this asset.
Trading at a profit
There are many solid trading strategies that can bring you a good profit if you follow the rules for entry and exit and know how to manage your risks. Almost all strategies are based on historical data. Over the past 10-15 years, computing power has significantly accelerated, causing increased liquidity on small timeframes. Such an increase in the processing power has made scalping very popular nowadays.
If back in 2008, scalpers accounted for 12% of traders, today, the percentage of traders who prefer scalping strategies has reached 77%. Many scalpers use algorithmic trading, i.e they trade with the help of Forex robots, also known as Expert Advisors. It helps them mitigate the negative effects of the so-called emotional trading and reduce the risk of human error. Trading robots use a simple algorithm based on the chosen trading strategy.
Using a good expert advisor, your monthly yield can easily reach 20-100%. But don’t get confused and tricked by shiny banners and misleading ads promising 1000% profitability in a week. Before handing over your trading to a Forex robot, you should be able to analyze the market and current trends to be aware of what is happening in the world.
Summary
It takes a lot of effort to trade professionally. Once you gain some trading experience and hone your skills in market analysis and manual trading, you can entrust your money to a trading robot. Using expert advisors can help you grow your deposit faster. But before switching to automated trading, it is essential that you backtest your trading robot on a demo account first.
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