Forex Trading Gbp Usd

Forex trading gbp usd

Trading GBP/USD

The British pound/US dollar pair is one of the most liquid currency trades in the forex space. The tight bid-ask spreads, volume and volatility, all ensure the popularity of day trading the GBP/USD is only set to rise. This page will break down everything you need to know, from the history of the GBP/USD pair to its benefits and risks. Strategies will then be offered, including technical analysis, trading hours, plus forecasts for 2020.

GBP/USD Trading Brokers

Trade Forex on 0.0 pip spreads with the world's leading True ECN forex broker - IC Markets.

Great choice for serious traders. ASIC regulated.

Pepperstone of spreads from 0.0 pips on the Razor account and have almost 60 pairs available to trade.

Interesting facts

Lots start at 0.01.

Binary.com deliver advanced forex trading via the MetaTrader5 platform and 3 Account Types

Forex trading is offered on 55 pairs, with spreads from just 1 pip on the Exclusive Account.

NinjaTrader offer Traders Futures and Forex trading.

Use Auto-trade algorithmic strategies and configure your own trading platform, and trade at the lowest costs.

Invest.com provide portfolio management plus standard trading.

Leverage and spreads improve with each account level - Bronze, Silver or Gold

Alpari International offer forex over a huge range of pairs including Major, minor and exotic pairs. All with competitive spreads and laddered leverage.

Trade 33 Forex pairs with spreads from 0.0 with the 'Zero' account.

Prices quoted to 5 decimals places, and leverage up to 1:1000

Vantage FX are a Raw ECN Forex broker, regulated by ASIC is Australia. Boasting MT4, MT5 and Webtrader platforms, a range of account types and a deposit bonus of up to 50%

Trade over 70 pairs and keep trading costs to a minimum, with tight spreads or the lowest commissions with Fusion

Just2Trade offer hitech trading on stocks and options with some of the lowest prices in the industry

New Forex broker Videforex can accept US clients and accounts can be funded in a range of cryptocurrencies.

Payouts reach 95% per trade.

Zulutrade provide multiple automation and copy trading options across forex, indices, stocks, cryptocurrency and commodities markets

Plus500 Offer forex trading via CFDs with tight variable spreads and a range of well over 70 currency pairs.

Free Unlimited Demo Account.

76.4% of retail accounts lose money.

Forex.com are a leading forex broker. Offering the largest range of currency pairs (80+) and some of the tightest spreads in the industry.

69% of retail accounts lose money with this provider.

Markets.com offer CFDs across a huge range of assets from shares and indices to commodities and cryptocurrencies.

CFDs carry risk.

64% of traders lose.

XM.com deliver ultra low spreads across a huge range of Forex markets.

Flexible lot sizes, and Micro and XM Zero accounts accommodate every level of trader.

68.15% of retail accounts lose money.

Trading 212 Offer a truly mobile trading experience.

With tight spreads and a huge range of markets, they offer a dynamic and detailed trading environment.

80% of retail accounts lose money.

AxiTrader offers competitive spreads on a large range of Forex and CFD markets, integrated into the MetaTrader 4 platform. FCA and ASIC regulated.

68.5% of retail investor accounts lose money when trading CFDs with this provider

IG offer spread betting, CFD and Forex trading across a range of markets.

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They are FCA Regulated, boast a great trading app and have a 40 year track record of excellence.

76% of retail investor accounts lose money when trading spread bets and CFDs with this provider.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. 75% of retail CFD accounts lose money. You should consider whether you can afford to take the high risk of losing your money.

75% of retail investor accounts lose money when trading CFDs with this provider.

How to trade GBP/USD (Cable): Tips & Tricks

You should consider whether you can afford to take the high risk of losing your money.

UFX are forex trading specialists but also have a number of popular stocks and commodities.

Offering tight spreads and one of the best ranges of major and minor pairs on offer, they are a great option for forex traders.

73.2% of retail accounts lose money with this provider.

Ayondo offer trading across a huge range of markets and assets. They also offer negative balance protection and social trading.

77.2% of retail accounts lose money with this provider.

24Option deliver a high quality forex trading service, with over 45 currency pairs and variable spreads from just 3 pips.

86.24%% of retail accounts lose money with this provider.

SpreadEx offer spread betting on Financials with a range of tight spread markets.

Popular award winning, UK regulated broker.

68% of retail spread betting accounts lose money with this provider.

ATFX are an award winning, UK regulated broker.

British Pound/US Dollar (GBP/USD) Exchange Rate

Offering Forex and CFDs with competitive spreads and a customer service focus.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.16% of retail investor accounts lose money when trading CFDs / Spread betting with this provider.

Forex trading gbp usd

You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.

Avatrade offer 50+ currency pairs and their spreads are some of the best among any broker. They are regulated across 5 continents.

71% of retail accounts lose money with this provider.

XTB are an FCA regulated brand offering CFD and Forex trades.

They offer 3 levels of account, Including Professional.

77% of retail accounts lose money.

A regulated bank, Saxobank offer CFD, Stocks and Forex trading on 35,000+ markets via the SaxoTrader Pro and SaxoTrader Go platforms

72% of retail accounts lose money.

Investous offer Forex trades from 0.01 lots, and with spreads of just 0.01 pips (variable). See if this new brand could work for you.

82.11% of retail accounts lose.

BDSwiss offer 250+ Shares, Indices, Forex, Commodities and Cryptocurrencies markets via CFDs.

With spreads from 1 pip and an award winning app, they offer a great package.

78.3% of accounts lose money when trading CFDs.

GBP/USD Advanced Live Chart

Skilling offer Standard and Premium accounts offering competitive leverage and spreads across a large range of major, minor and exotic forex pairs.

73% of retail CFD accounts lose money.

FXTM Offer forex trading on a huge range of currency pairs.

Spreads can be as low as 0.1 with the ECN Account types.

83% of retail accounts lose money.

Multi-Award winning broker. Specialising in Forex but also offering stocks and tight spreads on CFDs and Spread betting across a huge range of markets.

77% of retail accounts lose money with this provider.

FXCM are an FCA regulated, London based broker. Companies under the FXCM umbrella are also regulated in Australia and Canada.

73.62% of retail accounts lose.

Capital.com offer 68 Forex pairs for trading.

All have competitive spreads.

Forex trading gbp usd

The firm also ensure negative balance protection.

76.2% of retail accounts lose money.

Show All Brokers ⇩

Chart

Why Day Trade GBP/USD?

There are a number of reasons why thousands of people everyday head online to day trade the GBP/USD. Some of biggest benefits are detailed below.

  • Volatility – You will often find a wider price range with GBP/USD compared to other major pairs.

    Forex trading gbp usd

    This is in part due to unpredictability and volatility. Both of which result in higher spread quotes from forex brokers.

  • Relative safety – As two of the most modern economies in the world, the GBP/USD offers a multitude of resources for finding price information and data.

    It is thought approximately 35% of the volume traded in the FX markets goes through London. This means volume and volatility, both of which can be used to turn profits.

  • Diverse trading vehicles – The GBP/USD is one of the most liquid, cash rick currency pairs available.

    GBPUSD Forex Chart

    GBP/USD is the third most traded major currency pair, consisting of around 14% total daily trading volume. All of this means a range of trading vehicles and opportunities are available to switched on day traders.

  • Manoeuvrability – Those day trading the GBP/USD will benefit from a sizeable number of pips in a single move when compared to other major pairs.

    This makes it ideal for breakout trading. However, this does also bring with it risk, so utilising stop losses is important.

  • Availability of resources – In certain respects, conducting technical analysis is easier today than ever before.

    Forex trading gbp usd

    This is because you have graph history, long-term charts and 1-minute data just a few clicks away. Also, news resources and trading forums will offer predictions for today and long-term forecasts.

Drawbacks/Risks

Whilst trading GBP/USD forex appeals for a number of reasons, there are also certain risks to be aware of:

  • Rapid movement – The GBP/USD can move extremely quickly.

    Forex trading gbp usd

    Whilst this is great for fast, decisive traders, it also means you can lose money quickly. To counter this you need to be disciplined, employing effective risk and money management strategies.

  • Report heavy -If you were hoping to enter and exit positions based on straightforward information, such as closing prices and average daily ranges, you may be disappointed.

    This is because the cable often responds significantly to UK economic reports, especially when data does not marry with monetary policy speculation and expectations.

  • Ambiguity – The volatility of the GBP/USD often results in false signals and false breakouts.

    This means traders with less experience may fall victim to misleading signals. Some may argue that beginners should instead focus their attention on other currency pairs.

  • Automated competition – Even with competitive 1 month and yearly forward rates, today you face a serious challenge.

    This is because the markets are dominated by an increasing number of intelligent trading algorithms. As a result, you now need more than weekly forecasts and yearly charts to assert an edge.

So, day trading the EUR/USD may offer plenty of profit potential, but it does have its drawbacks.

Those investing in the currency pair should be aware of both sides of the coin before they risk their capital.

Influences on Movement

As you have probably gathered without the use of GBP/USD 20-year, 50-year, and 100-year charts, several factors shape market sentiment and prices.

The most influential of which are as follows:

  • Economic growth – When the US economy is looking stronger than the UK’s, the dollar usually rises against the pound.

    Likewise, when the UK economy outperforms the US’, the dollar normally weakens vs the pound. Interest rates, labour productivity, and increased investment can all boost growth.

  • Political events – As seen with the Brexit decision detailed above, political decisions can trigger movement in the GBP/USD currency pairing. Major elections, for example, can have a noticeable impact.
  • Monetary policy – As seen in the early history of this major currency pair, the actions of the Fed and BoE can seriously influence rates.

    So, keeping abreast of economic announcements and major decisions could help you assert a competitive edge.

Currency Correlations

What may not be clear on your GBP/USD real-time chart is the impact of ‘currency correlations.’ This may just be a phrase you have come across in forums.

GBP/USD Trading Brokers

Here is a breakdown:

Because currencies are priced and traded in pairs, no single pair is totally independent of other pairs. For example, if you are trading the British pound against the Japanese yen (GBP/JPY), in reality, you are trading a derivative of the GBP/USD and USD/JPY pairs.

This means that to some extent, GBP/JPY has to be related to either or both of the other currency pairs.

But whilst some will move in line with each other, others will move in the opposite direction. Once you realise this, you can begin to use this information to your advantage.

Calculation

It is best to think of correlation as a statical measure of the relationship between currency pairings.

This correlation can range from -1 to +1. The former suggests the currency pairs will move in opposite direction, whilst the latter suggests they will move in the same direction.

Trading GBP/USD

If the correlation is zero, the relationship is arbitrary.

The most efficient way to get your head around currency correlations is to calculate them yourself. Fortunately, it is relatively straightforward.

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An Excel spreadsheet will be your calculator, as you can use the correlation function (=CORREL).

Once you have that, do the following:

  • Input pricing data for your two currency pairs, for example, GBP/USD and EUR/USD.
  • Create two individual columns, each titled with one of the pairs.
  • Now fill the columns with the past daily prices over the time period you are using.
  • In an empty box at the bottom, type in =CORREL.
  • If you highlight all the data in one of the columns, you will get a range of cells in the formula box.
  • Then simply type in a comma.
  • Follow steps 3-5 for the other currency.
  • Now close the formula.

    It should then look like =CORREL (A1: A25, B1: B25)

  • The final figure you get is the correlation between the two currency pairs.

It’s also worth bearing in mind, over time correlations can change.

This can be as a result of monetary policy, plus economic and political factors.

Day Trading GBP/USD Strategy

Whatever your trading plan, whether it relies on weekly pivots and analysis, or historical data in Excel and 5-year averages, all the points and examples of strategy below can be of use.

Timing

There is a common misconception when day trading GBP/USD, that because the forex market is open 24-hours a day, you should be tuned in to your trading platform buying and selling all day.

This is simply not the case.