Forex Trading: Trading with GBP/JPY

Forex Trading: Trading with GBP/JPY

When you trade currencies with the help of HQ Broker, you are trading two currencies at a time. And there are a lot of currency pairs to choose from. Among them are the major currency pairs, minor currency pairs, and the exotic currency pairs as per Online Forex Review. Now, let’s focus on one of the most talked about pairs—the GBP/JPY

Nicknames for the GBP/JPY

The British pound-Japanese yen currency pair has gotten a lot of nicknames from traders and investors due to its volatility and market behaviour. Here’s a list of the nicknames for the GBP/JPY:

  • Geppy
  • The Beast
  • Dragon
  • The widow maker

Based on these nicknames, you can get an idea why investors and traders trade this with caution.

The Volatility of the GBP/JPY

As mentioned above, many traders do not go easy on trading the GBP/JPY because of its volatility.

In fact, if you’re going to rank all the currencies, the Geppy will come across as one of the most volatile pairs. If you’re going to trade it, you’re going to see and experience tons of false signals.

For beginning traders who want to learn hard knowledge about volatility, the Geppy can be a good tool, though of course the dangers may also weigh on their shoulders.

The Popularity of the Geppy

Even if this currency pair poses a lot of risks to traders, it’s still undeniable that it’s among the most highly popular currency pairs to trade. And this popularity is also due to its volatility.

Volatility doesn’t necessarily mean risks for everybody. A trader who knows how to get his or her way around volatility also knows that volatility can be his or her best friend.

The Geppy moves swiftly, making it an exciting pair for aggressive traders looking for potentially big scores, not ignoring the disastrous losses. However, if you’re an aggressive trader but you have tight stops and poor risk management, it’s better if you try another currency pair. Your capital will be depleted in just some days.

Meanwhile, beginners still flock around this pair because of the potential rewards they can get through pips, or price interest points. Of course, it doesn’t change the fact that starters should try an easier, more stable currency pair to trade. This currency pair is typically trendless which means that it can make you lose money fast even if your trading system and tactic is top-notch.

Trading the Geppy

If you really want to trade the Geppy, you first have to be extremely careful, as well as have a very good risk management.

On average, this pair can move 150 pip in one day, while on some days it can reach up to 200 pips. Many traders dealing with this currency pair set wide Stop losses and utilize small lot sizes. If you want, you can try cutting your normal trade size to around 1/3 or ¼. Though you cut them, you can still take advantage and aim for higher targets.

Conclusion

For beginners who are thrilled and eager to try this pair out, it’s better if you do it slowly. Try out other pairs with less volatility first, and then research more about the behaviour of the Geppy. As we have mentioned, high level risk management and extreme prudence are necessary to be able to trade this currency.

Categories: Finance

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