Another type of currency pairs, currency crosses are also among the assets available to binary options traders. They have several shared qualities that can help you make the right call, and we are going to go through the basics of trading them in the following article. Just like all other assets, these are also influenced by major global events, but the way they behave and the way they should be traded is a bit specific. As you probably know, the currency market is prone to changes, so educating yourself as much as possible about it is always a wise choice. With our help, you’ll be extracting profit from your trades in no time. Let’s go!
Currency Crosses | Basics
Generally speaking, each currency is representative of the economy it belongs to. That’s why they can be affected by so many different types of news from the business world. To put it simply, currency crosses are currency pairs that do not contain the USD. This is what differentiates them from their counterparts, Currency Majors. The main reasons why these types of pairs came about is the simplicity they brought to the market. Before they were introduced, every currency had to be turned into the USD first before some other currency could be acquired. Today, the euro is the most powerful currency when it comes to currency crosses, since the pairs involving it and the GBP, CHF and JPY respectively are the most traded crosses in the world. How are they traded? More on that in the next paragraph.
Currency Crosses | Trading
Currency crosses most often behave in a way that is opposite to currency majors, meaning that one will enter its consolidation phase when the other is moving. However, they usually spend slightly more time in their consolidation areas, so your expiry time in this case will usually be longer than that of the majors. Because of that, it is recommended that you use Binary Options Charts of the longer variety, like a daily chart, when examining data. Another distinguishing feature of these pairs is that they can be easily used in ranged trading, which means that using oscillators can be very effective and help you make the right choice. Oscillators will help you identify divergences, a fairly common occurrence when dealing with this particular type of assets. Just remember to follow the news regularly and extract relevant information from them.
Currency Crosses | Conclusion
Currency crosses are more numerous than currency majors, but in many respects they act very similarly. The biggest different between the two groups is the USD, which is in this case omitted. What is specific for currency crosses, however, is the fact that they tend to spend slightly more time in consolidation areas and that they are more suitable for ranged trading. If you want to learn more about these and other important trading terms and topics, browse our website a bit – you will find plenty of interesting materials.