As we’ve noted in previous articles there is a group of eight major currency pairs that dominate most of the trade in the forex market. Every one of these pairs involves the US dollar, so that begs the question: Where do you turn when you want your forex robot to trade a pair of major currencies, but not the US dollar?

Thankfully, there are forex cross pairs. A cross pair is essentially a pair comprised of two major currencies, neither of which is the US dollar. Some of the cross pairs you may already be familiar with are the British pound/Japanese yen (GBP/JPY), a favorite of many traders due to wide pip ranges, and the Australian dollar/yen (AUD/JPY) and New Zealand dollar/yen (NZD/JPY), which are both part of the infamous carry trade.

Other Major Cross Pairs

Another major cross pair is the Euro/Swiss franc (EUR/CHF) and British pound/franc (GBP/CHF) because the U.K. and Switzerland are so close to the Eurozone and these countries are primary trade partners of Eurozone nations.

Another cross pair worth watching is the Canadian dollar/yen (CAD/JPY) because Japan imports a lot of oil from Canada. The Australian dollar/New Zealand dollar (AUD/NZD) is another proximity trade that is worth watching. The point is you don’t need to watch every cross pair. Just stick to a few of the important ones and you’ll find plenty of opportunities to make pips.

And as these are all major currencies we’re talking about, many of the same news events that impact major pairs will also impact the noteworthy cross pairs, so if you’ve already had some success with the majors, cross pairs may just be the challenge you’re looking for to take your forex trading to the next level.

Are Cross Pairs As Risky As Exotics?

Trading cross pairs isn’t as risky as trading exotic currencies, but it is probably best to consider cross-pair trading an intermediate forex trading strategy. It’s probably advisable for new traders to wait a few months after they start trading before tackling cross pairs. Another issue to consider for traders that want to trade cross pairs is cost. Let’s say you trade in the U.S. and you’ve fund your forex account with US dollars. You decide you want to trade the GBP/JPY, but since the dollar isn’t involved and your account is denominated in your dollars before you enter that trade, you have to use dollars to buy pounds. Once you’ve bought the pounds through your forex broker, you can enter the GBP/JPY trade, but that also means you’ve paid two transaction costs instead of one.

Now that you know the usefulness of cross pairs, you’ll have to find a forex robot that will allow you to trade them. Every good forex broker will allow you to trade cross pairs, but do some shopping when it comes to the forex robot because most forex robots will only let you trade dollar-based pairs, at least on the default settings. See if your forex robot’s settings can be manipulated to trade cross pairs.

Author Bio: Francisco Pizarro G. made a career from Forex and left my profession as a Translator almost 4 years ago; since then I work from home in my small office trading the Asiatic markets during night time, where I found a good niche. I am a fan of Forex Robots

Category: Finances
Keywords: Forex Robots, Day Trading, Forex, Forex Brokers, Finacial Advisors, Expert Advisors