Finding Predictable Currency Pairs

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Newcomers to forex trading usually start off with the popular pairs: EUR/USD or GBP/USD. While these pairs are OK, these might not always be the best pairs to start trading with. I’m fond of the Australian dollar – AUD/USD, and I find it the most predictable pair. I chose this pair based on my experience and my observations. Using these social indicators, I found that I’m not alone.

The British Pound and the Euro are popular currencies. Many forex traders start with these pairs since they hear about them all the time. You hear about them all the time from brokers who offer low spreads on these pairs. Also on the web, these pairs are talked about very often, sometimes too often.

currensee

This talk can be too much, even confusing. Well, there are other pairs out there. Brokers don’t offer the best spreads on them, but we aren’t here for gaining an extra pip on the spread, but making more winning trades.

In my post about the 5 most predictable currency pairs, I ranked AUD/USD at the top of the list, followed by EUR/GBP. This was based on my experience and my constant observation at the markets. More predictable currency pairs obey the rules of technical analysis better than others. A distinct support  or resistance  line, will be the spot where the currency turns around, or if it breaks the line, it will go further in that direction. Predictable pairs have less false breaks.

Now my observation is supported by Currensee’s social indicators. I took a look at the community’s activity, which is based on real trades, and saw that 91% were winning on AUD/USD, taking long positions. Such a landslide victory means that the this is a very predictable pair, especially when the community was trading with the trend.

As you can see, at the time of writing, EUR/GBP, my second pick wasn’t doing well. Also note that the popular pairs, EUR/USD and GBP/USD made unexpected moves, to say the least. At the time of taking this screenshot, no one was reading these pairs correctly.

As the community grows, more trades will be listed, and these social indicators will be of higher significance. Currently, the community does better with some pairs more than others – the more predictable pairs.

Join the traders community at Currensee. It’s totally free.

Full disclosure: I’m affiliated with Currensee.

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

12 Comments

  1. eristonsho on

    Hey guys ,please let s talk more on forex especially on the above topic on more rewarding pairs
    Me i personally enjoy the article and would like to read more of it
    Tim.

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  3. Dr. Som Majumdar on

    Hi, I agree with your view that 91% of the traders on trading a pair of AUD/USD may be winning on Long position. This is because the spread on this pair is always in a range of 2 PIPs (BUY v SELL). Besides, this pair is fairly predictable on its movement by making a cross reference of Pivot point to Resistance 1 and/or Support 1. The economic indicators do also give some kind of future direction. For an instance, Aussie inflation rate of Sep Qr is 0.7%, lower than alarm point of 1%. The Reserve Bank has produced a massive loss this financial year, so if the cash rate is increased followed by Fed Reserve of QE2, the demand of A$ will be high as it pays good yield and then RBA Balance sheet may have a potency to go red once again. Based on this analysis, I guess the rate will stay “On Hold” and in that case AUD/USD pair may move south indicating a “Short” position as entry point being a good guess. . . . your views please . .

  4. Greathart Ajaero on

    Hi,
    I”m glad to have you as a mentor.You know, i’m just a beginner and i’d like you to tell me the meaning of these terms – Quantitative easing,Pivot point,ICE Dollar index,Tax cut and how all these affect a pair.
    I sincerly love your analysis and i expect to read more of them.
    Best regards,
    Greathart.

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  6. Tarek Adel on

    hello sir ”
    job seeker and need to find vacancy at any brokerage firm

    KIND REGARDS

  7. This article is a big help for every newbie. This is a must read! Keep it up!