Many traders focusing on EURUSD or USDJPY will find that they are not alone. These important pairs rule the global forex market because they are very liquid, have narrow spreads and there is always a lot of news about them. Yet, they are usually congested, react excessively and undergo a lot of stressful analysis.
Meanwhile, currency pairs not as often traded show different and sometimes more interesting price movements. Nevertheless, these pairs are riskier and offer wider spreads, but this means they have simpler technical rules, fewer mixed signals and clearer responses to economic news.
It isn’t meant to show off obscure instruments; it’s really about noticing where information appears that’s beyond the top music reports. Octa Broker recommends four alternative brokers instead of the majors that should be carefully looked at.
The main reason these pairs are traded less often is because….
It is easy to understand why a lot of traders prefer to trade the major pairs.
- Limited liquidity: Rapid and possibly big changes in price with wider price gaps can happen for secondary and exotic pairs when trading is slow.
- Low liquidity means that buyers and sellers pay more to complete a transaction.
- Since trading occurs more quickly during periods of big swings or low traffic, more slippage happens then.
But these traits can be positive in certain situations. Understanding when to make trades and how to control risks helps traders get more benefit from lesser-known pairs when major volatility drops.
High-Volatility Currency Pairs
1. There is no greater example of big swings than GBPJPY.
Because the British pound is politically sensitive and the yen is sought after for safety, this cross often sees quick and big intraday fluctuations. Swift to change but following technical rules.
- Second, how much is the 200-day Average True Range (ATR)?
- Trade it because inflation in the UK moves Bank of England to limit monetary policy sooner than BoJ.
- To use momentum strategies well, always remember to be precise in placing your stops, so the market can’t whipsaw you during periods where few people are trading.
2. AUDCAD – Seeing a Calm Separation
While AUDCAD may not show big changes outwardly, there is a battle going on behind the scenes between iron ore and oil and between demands from Asia and the U.S. Usually, these contrasts are what help fuel strong moves.
- ATR: ~0.00600 (over a 200-day moving average)
- Fundamental change in commodity prices or risk environment often pushes prices to a new high or low.
- Suitable for swing traders because it lets you determine when to open and close your positions. Preferably done outside of phases when commodity prices are stable.
Pairs that have Lower Average Volatility
3. Ranging in USDCHF Can Be Very Useful
When trading with the U.S. dollar and Swiss franc, the result is a calm, reliable trading environment. The SNB may step in occasionally, but this currency pair is usually precise and quiet.
- ATR is almost always below 0.00800.
- Because it yields: ShowsEuropean sentiment toward risk; it tends to trade within set zones.
Suggestion: A good candidate for range or mean-reversion strategies, especially when data from the economy is released.
4. EURGBP is considered the favorite of many Technical Traders.
Compared to the other pairs, EURGBP is less volatile but gives smooth and manageable trends. How the UK and Eurozone economies compare and differ in their monetary policies plays a major role.
- ATR: ~0.00972
- A broad view adds that the end of Brexit turmoil has brought attention to the contrasting statements made by the ECB and the BoE.
Dislocations in the market caused by policy shifts tend to suit breakouts and trend following for favors.
Summing Up: Changing to Off-Grid Living Has Advantages
It is now harder to enjoy an edge in mainstream currency pairs, since the market for forex traders is very active. Because of this, more traders are searching beyond the most famous assets for real reasons, not just for something different.
GBPJPY and AUDCAD are good choices that give prepared traders frequent and noticeable moves. When investors think risk is higher, EURGBP and USDCHF give them a more stable and well-structured choice. They are not suitable for all trading approaches—but those who understand these currencies can realize unexplored chances.
Trades done when little attention is paid are sometimes the most favorable.
Note: Trading Contracts for Difference (CFDs) has substantial risks and isn’t suitable for everybody. Always check how much bitcoin you are dealing with and always act sensibly.
About Octa
Since 2011, Octa has given all its customers access to worldwide financial markets without charging commissions. There are over 52 million accounts opened by traders from more than 180 nations, who receive educational information, insights from experts and helpful tools. Social responsibility is important to the company which is demonstrated through educational programs and assistance for people in need. The number of prizes won by Octa exceeds 100, with the tests confirming them as ‘Most Reliable Broker Global 2024′ and ‘Best Mobile Trading Platform 2024’.
