Let’s say that there are two versions of the same shirt in front of you, but in different colors. You find both the colors very nice and want to buy both of them. But then again, you don’t have the money to buy both. Now, this is a dilemma but sticking with only one shirt is the best option for you to save some bucks and not waste money you may need for something else.
Traders face some similar issues in the currency exchange market when they are dealing with currency pairs. What is a currency pair? A currency pair is a set of two currencies where the value of one currency affects the other. CFD investors invest in these currency pairs. Due to the difference in supply and demand, they earn money.
However, there is a common question that is asked by many investors regarding this currency pair. The question is whether to trade with a single pair or multiple pairs? While this topic is already controversial, the concept of misinformation adds more fuel to it, making it harder for amateur traders to decide how and when to trade.
There are various opinions with this and people often say that putting your money in more than one currency pair is more profitable as you can have many options to trade. In that case, even if you lose when trading in a single pair, you will always have the chance to win in the other pairs you trade with. However, there are still some side effects of trading multiple currencies, especially if you are a beginner. So, today we will be explaining how you can make some profit out of trading just a single currency pair.
Step 1- Pick your currency pair
Choosing a currency pair can be a bit difficult at the beginning. But analyzing the charts and calculating the volatility of the pairs that match with your trading style can help you to find the best currency pair. If you are looking for a highly volatile pair, then you can look at the ‘major’ currency pairs where the value changes rapidly. If you are looking for a low volatile pair, you can look for the ‘exotics’.Check this here and you will find thatSaxo is offering wide range of trading instruments. As a new trader in the Mena region, you can easily pick your favourite trading instrument and start taking some real trades.
Step 2- Plan your trading
After you are done choosing a currency pair, the next step for you would be to think of the ways to trade it. If you are trading only one pair then you need to be very accustomed to the market phase and identify the price movements of the pair thoroughly.
Step 3- Follow charts and draw trend lines
Now the first condition to trade in this market is to be prepared to analyze the charts. But looking at the charts is not enough only. You also need to be able to draw the trend lines in your charts to articulate the price movements efficiently. This is a very important step for you to observe the market and know when to execute a trade.
Step 4- Remain consistent
Consistency is very important when you are investing in a single pair. You don’t have any other pair to invest in. So, if you lose your money by trading only one currency pair, you might not get any chance to recover that money from other sources. That’s why you need to be careful that you don’t give up halfway through and that you complete your transactions successfully.
Trading a single currency pair also helps you to remain focused. Side by side makes it easier for traders to concentrate on a single market only. They also don’t need to worry about the currency correlations to investigate future price movements. This is also a great opportunity for traders to trade with less stress and with a more solidmind-set.