GBP/USD will be the third most traded currency pair in the world. Therefore, there are many people who trade this currency pair. So, it is often said that the pound dollar is easy to do, but what is the reason?
The pound-dollar price movement is easy to stabilize
The biggest feature of the pound dollar is that it tends to be stable in price movements. The pound dollar has been in a range market since around 1970. Below is the monthly chart from 1970 to 2023. There is no big trend, it goes up and down repeatedly. The pound-dollar has the characteristics of the third largest trading share in the foreign exchange market. Because it is actively traded, unilateral price fluctuations are less likely to occur. When a unilateral movement occurs, there is always a tendency for a supporting force to act.
Source : Tradingview
When the pound dollar moves
The time zone in which the pound dollar often shows price movements is from European time to New York time. During this time period, Europeans and Americans trade frequently, so price movements are very likely to occur. Conversely, when it comes to Tokyo time (Asian time), the pound dollar rarely moves. In most cases, the market is in a range, and it is normal for it to show no signs of movement at all.
Is pound dollar easy to do?
The pound-dollar is one of the easiest currency pairs to work with. The pound-dollar is a currency pair that is highly recommended for beginners, for the following reasons.
Those who play Eurodollar may find it very sluggish, unexciting and boring. The pound dollar is recommended for such people. The sterling dollar doesn’t see as much speculative activity as the sterling yen. The pound-dollar moves more gently than the pound-yen, and the price fluctuations are more intense than the euro-dollar, so it has just the right amount of volatility, so it is highly recommended for beginners.
No habit of price movement
In the case of the pound dollar, there is no strange habit in price movement. This trend is very common in pairs with the US dollar. The same is true for the euro-dollar, dollar-yen, etc., but due to the large trading volume, if you try to move at once, it is easy to cause a rebound movement, so it is easy to stabilize. The pound dollar is a pair of major currencies, so it is highly stable.
Suitable for both day trading and swing trading
In the case of the pound-dollar, the price movement is stable and the volatility is moderate, so it is highly recommended for both day trading and swing trading. In the case of the pound dollar, both are very easy to earn because the balance is very good. When it comes to EURUSD, it is not suitable for day trading because the price movement is too small. If it becomes a pound yen, the price movement will be too intense, and if you can’t keep up with the trend, you will lose a lot.
You can also scalp
Since the pound dollar does not fluctuate greatly, it is possible to aim for scalping. There are a lot of traders who do scalping, especially during times when there are only quiet price movements.
XM is recommended
XM was originally known as a forex company with too wide spreads. But this was only recently. Now there is an account type called KIWAMI account. The spread is very narrow and very suitable for trading. Therefore, this account type is highly recommended. Especially for those who trade in pounds, it is recommended because the spread is extremely narrow.