How to choose the best currency pairs to trade on Binomo
How do you choose what derivatives to trade? Since Binomo offers several financial instruments, it’s natural to have a hard time picking out the best ones for you. You can choose between stocks, cryptocurrencies, commodities, and of course, trading derivatives on an online platform. Interestingly, as much as 92% of all traders on Binomo are shown to prefer derivatives trading out of all the choices.
So, what could be the reason why traders seem to go for derivatives trading more than any other financial instrument out there? One of the biggest reasons could be its high earning potential. Based on past performances, derivatives trading can usually yield much higher returns than other choices, up to 80% and more at times, given the associated risk. In addition to this, although currency pairs can offer higher returns, the majority of them, especially the major ones, are still not as risky or volatile as cryptocurrencies.
On the other hand, currency pairs are also some of the easiest instruments to trade since price fluctuations can occur fairly often, making it highly possible to be able to make several trades in a single day.
Interested yet? In this article, we’ll show you exactly how to choose the best currency pair for you on the Binomo platform.
How to know the best currency pairs to trade on Binomo?
One of the best ways to know the best currency pairs to trade on Binomo is to simply stay updated on news and current global affairs.
The truth is, most currency pairs, be it major or minor, are always greatly affected by any news or press releases. If there’s a major news release that involves a country, you can usually expect some fluctuations with that country’s currency. Some traders ride on volatility to make a quick buck. Others, meanwhile, don’t like trading during those highly volatile times.
How to avoid trading during news times?
If you’re not the kind of person who can deal with that kind of stress though, it is probably the best to avoid trading during active waking hours in the countries where the currency pair you want to trade originates from.
First of all, you have to know when the different markets open according to your timezone. Indonesian traders can take advantage of the fact that Asian markets are open at the same time as theirs, but they have to keep in mind that North American markets are only open during night time in Indonesia.
Second, you have to know when the news is usually released in different markets. Most news are released in the morning, but again, you have to consider the market and the local timezone. For instance, if you’re a trader from the USA who would like to avoid trading SGD while the news is still showing, you might want to trade in the morning since that corresponds to nighttime in Singapore. If you’re from Thailand and you want to trade USD without the volatility caused by news releases, trading in the morning or noon would be ideal.
It’s best to stay updated with all the latest trading news
Now that you know these two important things, you can now begin scheduling your trades while remaining unaffected by news releases. Using what we learned above, it makes sense, for example, to trade USD/GBP during morning sessions and KRW/AUD during evening sessions.
If a news item affecting GBP is released, it might be afternoon in Vietnam. Using this knowledge, you will have a good idea about when it’s best to trade a particular currency pair without being affected by a news release. Using the above examples, a Vietnam-based trader can trade the USD/GBP currency pair during the morning hours and the JPY/AUD pair during the evening hours.
Trading one currency pair is enough
When it comes to investing, we all know that the saying ‘don’t put all your eggs in one basket’ applies to most concepts. But in reality, it’s actually a lot more complicated than that.
If you’re a beginner trader, it’s highly recommended that you trade just one currency pair at the start. Yes, it appears to be counterproductive since Binomo offers over 80 currency pairs. And yes, it doesn’t seem smart to put all your proverbial eggs into a single currency pair basket, right?
Well, maybe not. Here are some of the reasons why trading just one currency pair could be beneficial for you.
Trading just one currency pair at a time may be more fitting for you
You can learn your currency pair by heart
Knowledge is power – especially in the world of trading. A knowledgeable trader who really knows the ins and outs of the market has a much higher chance of making it big than a trader who only makes trades based on the gut feeling.
By choosing just one currency pair, you can take all the time you need to learn it inside and out. You can memorize the market schedules, you can get used to news releases, and you can familiarize yourself with its movements. You can even safely implement new strategies to make sure that you can achieve your maximum earning potential. It shouldn’t take you that long since you already know your currency pair by heart.
Now, imagine if you had 10 different currency pairs at one time. You have to multiply all that by 10 to know how much time and effort you would need to exert just to successfully juggle all of them. Not so easy, is it?
Keeping track of different pairs can be confusing
Aside from the time and effort needed, keeping track of more than one currency pair can also be really confusing. Imagine if you’re trading JPY/USD, EUR/AUD, and USD/EUR at the same time. This means that you’ll understandably spend less time monitoring each one than if you only had one to keep track of. You might even miss some key happenings in one market since you’re too busy keeping an eye on all three, leading to an inevitable loss.
By trading just one currency pair at a time, you’re allowing yourself to be able to follow the market closely. You’ll have more time to spend in analyzing the charts and checking out indicators, both of which can help you complete more successful trades in the future.
Less stress
Stress is inevitable if you have to manage more than once currency pair
Have you ever worked on multiple things at once? We all have, at some point in our lives. In the case of currency pairs, it can’t be denied that juggling several pairs at one time can cause any trader additional mental strain.
Simply put, it’s always more stressful to trade multiple pairs than just one pair. Many inexperienced traders who think they can already handle multiple pairs tend to always be on the edge, since they’re always worried about potentially making the wrong choice and suffering from a loss. The additional stress caused by trading more than one pair at a time can also cause you to lose concentration, and we all know that without proper concentration, it’s very likely your trading performance will also decline.
You can avoid this situation just by taking on a single currency pair instead of multiple. Doing so lets you direct your focus to one thing, therefore reducing the stress and worries that come with any kind of trading.
Patience is a virtue when trading on Binomo
It may not always seem like it, but the truth is, trading is nothing more than a waiting game. You need to be patient and observant enough to see when the best trade entry points are. You may not be able to find them often when trading just one currency pair, but when you finally do, it’s certainly going to be worth it.
What’s your strategy for picking your favorite currency pair on Binomo? If you don’t have one yet, well, we hope our short guide helped to steer you in the right direction. Let us know your thoughts in the comments below!
Good luck on your trading journey on Binomo!