Who prefers GBP/USD to EUR/USD for intraday trading, and why?

[JTrader]

Hi

Who prefers GBP/USD to EUR/USD for intraday trading?

If so why?

I have favoured EUR/USD (spot market for now) as it's the "bigger" curreny pair, but of late I have noticed that GBP/USD (spot market for now) may provide equal or greater opportunities for intrady profits, due to more significant price moves.

Because GBP/USD doesn't have as high a volume as EUR/USD do you think that price movements may occur more easily, with greater fluidity, but with enough obviously, with enough volume for there not to be gaps?

What's your take on this?

Cheers
jtrader.

 

[TheBramble]

I have favoured EUR/USD (spot market for now) as it's the "bigger" curreny pair, but of late I have noticed that GBP/USD (spot market for now) may provide equal or greater opportunities for intrady profits, due to more significant price moves.

Because GBP/USD doesn't have as high a volume as EUR/USD do you think that price movements may occur more easily, with greater fluidity, but with enough obviously, with enough volume for there not to be gaps?

What's your take on this?

I trade Cable because I'm new to FX and want to concentrate on a single pair and get to 'know' that well. Whether my Cable experience will/can translate to other pairs is yet to be determined, but I do occasionally take a peak. Especially at the JPY pairs. The setups I use on Cable would seem to work as well on other pairs.

But I'm interested in your comments on 'bigger' currency and 'high volume'.

What did you mean EUR/USD is the "bigger" currency?

And how are you establishing absolute or relative volume when you say "GBP/USD doesn't have as high a volume as EUR/USD"?

I don't yet know enough about FX to answer your last question, but if FX is anything like other instruments, lower volume usually translates to lower liquidity, higher spreads and less volatility.

Perhaps the spread per pair, if it could be normalised, would be a useful proxy for relative volume?

 

[JTrader]

Hi
well EUR/USD is "bigger" than GBP/USD having higher volume, but don't ask me to provide the stats that prove this , but the narrower spreads, and the CME futures confirm this.

If EUR/USD has higher volume, perhaps this means there are more orders (volume) at each price, making price movements more difficult than cable. Whereas cable, although not illiquid, as it still has enough volume not to result in gaps, may enjoy easier price movements?

Cheers.

 

[JTrader]

Anyway, who prefers GBP/USD to EUR/USD for intraday trading, and why?

 

[jezza888]

I prefer cable purely because for every 100 the Euro moves, Cable usually moves 150.

 

[JTrader]

I prefer cable purely because for every 100 the Euro moves, Cable usually moves 150.

Thanks jezza
thats kind of what i was thinking. Do you find that cable always moves as smoothly as EUR/USD in 1 pip movements without gaps, or can cable price movments sometimes jump in more than 1 pip steps at a time (under normal market conditions, besides following major news releases)?

Cheers
jtrader.

 

[Big Pippin]

In my experience, it seems like the EUR/USD moves more in line with indicators especially in short timeframes.

WIth the cable, there tends to be more spikes which can make technical trading a drag sometimes. However because of the larger movements, it does seem to produce more trades for me.

I've mainly been trading the EUR/USD for the past 2 years now and although it produces less trades than the other majors for me, it has been pretty consistent with the technical indicators I use.

I started trading the Cable profitably for about a year now but I use a totally different strategy because of the bigger spikes.

To answer your question, I don't think there is a "better" pair. They each move differently and the most important thing is for you to study their movements and find or create a strategy that compliments it.

Good luck in your trading.

Cheers,

-BP

 

[FXSCALPER2]

Thanks jezza
thats kind of what i was thinking. Do you find that cable always moves as smoothly as EUR/USD in 1 pip movements without gaps, or can cable price movments sometimes jump in more than 1 pip steps at a time (under normal market conditions, besides following major news releases)?

Cheers
jtrader.

GBPUSD is one pair that doesn't respect technical levels. Anybody who watches the price will very quickly realise this. The reason is that GBP is affected by the bigger pairs EURUSD and USDJPY. It is virtually unheared of for EURUSD to do something without GBPUSD following. It may seem pointless to trade GBPUSD for this reason. Let me explain.

Let's say Cable has support at 1.7450 the price is now close to that point. Let's also say EURUSD is directionless and is moving up and down within a tight range. A fast 10 pip move down in EURUSD within the rage can make GBPUSD break support. This happens a lot. In these cases GBPUSD usually comes back up but not before trapping some breakout players and shaking out some weak longs.

To trade GBPUSD successfully therefore requires keeping an eye on the EURUSD and USDJPY pairs. The question then is: why not trade the big ones and let go off cable? The advice I give to inexperienced traders is to stick to EURUSD. That pair is by far the easiet to trade because it is huge and largely independent of the other pairs. One reason one may trade Cable is if one likes to get their profits (as well as their losses quickly).

Having said all that, once you know what you are doing, GBPUSD can be the best pair to day trade because it gives you one of the most important aspects of successful trading: everthing else being equal, an instrument that gives you a lot of opportunities to trade is the one you should choose.


P.S. You will also generally need a wider stop with GBPUSD.

Hope this helps.

 

[JP1966]

I actually disagree with a lot of FXScalper's points- but that is why there is a market!

Of all currencies cable can move especially on econ data. It is finds it very hard to recover intra day if it has started off weak.

Lets take tomorrow as an example. If the inflation numbers are out by 0.2 then you would expect cable to gap say 20 pips and then move another 50. Throughut tis time euro dollar would hardly move.

The reason I like cable so much is that it is less liquid than euro dollar and hence can move more.

 

[FXSCALPER2]

I actually disagree with a lot of FXScalper's points- but that is why there is a market!

Of all currencies cable can move especially on econ data. It is finds it very hard to recover intra day if it has started off weak.

Lets take tomorrow as an example. If the inflation numbers are out by 0.2 then you would expect cable to gap say 20 pips and then move another 50. Throughut tis time euro dollar would hardly move.

The reason I like cable so much is that it is less liquid than euro dollar and hence can move more.

I agree completely. A GBPUSD move does not affect EURUSD. What I said is the oppsite: If EURUSD moves GBPUSD follows and that is a fact. You are also right that GBPUSD moves a lot on fundies and by itself. What is hard to do with Cable is to trade it in isolation and on TA which you can do with EURUSD.

 

[Mornington Crescent]

What is hard to do with Cable is to trade it in isolation and on TA which you can do with EURUSD.

you may find it hard, but dont assume that everybody does.

maybe you should rethink the way you trade it.

 

[jezza888]

A good example of the normal difference of cable VS euro...

(Assuming sold both at 7am)

 

[JTrader]

Thanks jezza

I was just going to post something similar!

4O pips on cable would have been nice this morning, but then if cable is more volatile as well as faster moving at other times, I would be greatful for the slower and lesser movements of EURUSD.

What if any, UK economic news releases have an effect on cable? and where can i find an economic calendar that gives details?

The calendar at http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm
only details US news releases.

 

[jezza888]

There are a few....

http://www.dailyfx.com

http://www.forexfactory.com

http://www.fxstreet.com

Slow is boring IMO and I'd prefer speed and 40 than the slower pace of the Euro. As I type the euro is still only around 10 pips whilst cable is now at 60....

 

[JTrader]

Thanks jezza

Slow can also equal whipsawed in & out of trades, so both have +'s & -'s.

So with GBPUSD already having moved 60 pips this morning, what has caused such movment given that there have been no economic news releases so far this morning? Are the movments perhaps in anticipation of the UK news events at 930 GMT?

Thanks.

 

[jezza888]

Not sure, can only think of the FED bloke speaking as the most recent event but I am a purely chart trader so don't pay that much attention to news releases etc.....

 

[JTrader]

but I am a purely chart trader so don't pay that much attention to news releases etc.....

Same here, except I just want to avoid the major releases!

Do UK and European news releases tend to have a significant impact on GBP/USD, or do the news releases that significantly impact on cable all GBP/USD from the US?

Are there any European news releases that significantly impact upon EUR/USD?

tHANKS.

 

[jezza888]

Bit of both for all really, a fundamentalist would be the best to ask but NFP, and a few others will move cable 50 pips in a blink of an eye. I have never really looked into it that deeply.

In regards to avoiding the news releases, I personally prefer and relish them. When the majority vote is to 'exit all positions' before hand, I work every possibility into my tech view and get the most of all big moves (usually!!)

 

[JTrader]

In regards to avoiding the news releases, I personally prefer and relish them. When the majority vote is to 'exit all positions' before hand, I work every possibility into my tech view and get the most of all big moves (usually!!)

I might look at jumping on board after major news releases, after the initial chaos, and once the direction seems to have been determined, but am still in week 1 full-time and yet to place a trade as still playing with tradestation 8.1 strategies, peripherals etc!

 

[FXSCALPER2]

Same here, except I just want to avoid the major releases!

Do UK and European news releases tend to have a significant impact on GBP/USD, or do the news releases that significantly impact on cable all GBP/USD from the US?

Are there any European news releases that significantly impact upon EUR/USD?

tHANKS.

Most EU news affect GBPUSD only if they affect EURUSD. GBPUSD often moves a lot around UK news without the other pairs doing anything. In general, the impact of EU news is not that signifcant.

All this could change becuase there tends to be a fashion in how news affects prices in FX. There is usually a valid reason for the change in emphasis. But not always. For example, with EU unemployment rate at nearly 10% and US's at around half that, the reaction on NFP days is pretty irrational.

That is why one has to be careful about trading on fundies. This is not about trading on news. Trading on news is just participating in [in most cases] irrational, knee-jerk reactions. Trading on fundies requires a certain type of mind. Since the information one has to assimilate is so vast, one has to be able to do quite sharp analysis and have good instinct as to how the fundies affect price over time. This is something very few people can do. Hence charting and the huge following of TA. TA can be profitable and, in most cases and for most people, it is better to stick to it because the skills required for fundies are hard to aquire.