You say tend to stay away from US dollar. However, my account would be in US dollars. If I trade other pairs, doesn’t that force me into the us dollar by having to convert it, and then close out and be affected by it again?
In other words if I choose long eur/gbp, what if the US dollar drops against the euro and the euro increase against the gbp, won’t that negate my profits?
the Bapypips school explains this perfectly, so go through it if you haven’t already. But, you’re not converting anything. You’re pretty much just betting on whether one currency will be stronger or weaker than the other
The banks don’t manipulate USD, its too big. Obviously the banks are big enough to move price but that’s just the normal action of supply & demand, its not a concerted plan. This manipulation theory is possibly a smokescreen.
Actually the better known currencies I find I have to stay away from are AUD and NZD, then NOK, PLN, SEK, MXN, SGD, TRY, RUB, ZAR and anything smaller. Problem for me is I use TA-based stops trading off D1, so often the minimum position size which I can put on far exceeds a risk of 1% or even 2% of account capital. Plus thew spreads are wide and during volatile time periods they go huge. Probably untradable.
Looks like RUB (Russian Ruble) and ZAR (South African Rand) will stabilize (and/or are stabilizing) and may pay lower rates than typical for these days. (Still greater than 2%)
The sharper the intra-day moves on a currency (see Turkish Lira) are the more longer-term considerations one should usually make. For instance, hold exotic pairs for 1-week minimums and anticipate big fluctuations in paper profit/loss.
Also, these pairs have some of the lowest spreads with most brokers because they’re so liquid. IMO, if you intend on staying away from US pairs then you might reconsider trading altogether
You really need to finish with checking out school here no matter what. It’s really done like that and should be done like that. You simply take all this much and they should convert it all in two pairs , like jpy/usd and usd/jpy or something like that. That way there is no conversion at all.
All other major vs. major pairs are as “safe” as USD pairs, the only difference is the spreads can be higher. NZD/CHF is as decent an instrument as EUR/USD for the most part although EUR/USD is more liquid and predictable more often than NZD/CHF.