In general, the forex market follows trends more than the stock market. As the latter monitors the publicly-listed companies’ micro dynamics, the former monitors macroeconomic trends. These trends are more visible in major pair currencies.
The 4 major currency pairs like EUR/USD, GBP/USD, USD/JPY and USD/CHF are the most popular pairs being traded in the forex market. The yen, euro, and USD dollar are the most liquid and active currencies around the world while the pound sterling is considered a major currency because of tradition. The United Kingdom was the 1st country to create a sophisticated capital market. The CHF, on the other hand, is known to be a safe currency because Switzerland is famous for its fiscal prudence and neutrality.
The EUR/USD is understandably the most liquid financial asset in all foreign currency pairs. Its total trades amount to nearly $1 trillion daily in all forex sessions. The European Union and the United States of America are also the largest economies across the globe. Due to the magnitude of the economy of the European Union, traders consider the euro as the preferred reserve currency to the US dollar.
Trend trading is considered successful if its outlook is for a longer term because a trend is considered strong if the short term, intermediate-term, and long term trends all agree in one direction. This can be verified by using the 3-simple-moving-average filter.
If you’re trading these major pairs, it is important that you spot trends before everyone else does. As such, you must always be on your toes monitoring the forex market 24/5. However, it will be utterly impossible to be trading even for just a full 24 hours. I found a solution and I’m using it on my forex trading activities. You see, I took advantage of OANDA’s forex signals. What I like about these signals is that I don’t have to be online all the time. I get the signals through my mobile phone and my email address.