Trading major currency pairs in forex requires a balanced approach combining technical indicators with fundamental insights. As an intermediate trader, understanding the nuances of pairs like EUR/USD, GBP/USD, and USD/JPY is crucial to developing consistent strategies.
Technical analysis involves analyzing chart patterns, trend lines, and indicators such as Moving Averages, RSI, and MACD to identify entry and exit points. For example, a crossover of the 50-day and 200-day moving averages can signal trend reversals.
Fundamental analysis entails monitoring economic indicators such as GDP growth, employment reports, and Central Bank announcements. For instance, a dovish stance from the Federal Reserve often results in USD weakening, impacting major pairs.
Trading strategies include trend following—buying in uptrends and shorting during downtrends—and range trading within well-defined support and resistance zones. Combining these with Fibonacci retracement levels can improve timing.
Risk management practices involve setting stop-loss orders based on ATR and maintaining proper position sizing to prevent overexposure. A typical approach is risking no more than 1-2% of capital on a single trade.
Finally, staying informed through economic calendars and news feeds allows traders to anticipate volatility and plan trades proactively. Incorporating these techniques helps create a disciplined, systematic approach to trading major currency pairs.