Cable trading: A beginner’s guide to trading
New traders may have heard the word “cable” in Forex trading. This post will explain cable in trading and why novices should know it.
Cable, what?
Cable is the exchange rate between the British pound sterling (GBP) and the US dollar in Forex trading. This word came from when transatlantic cables carried the currency rate between the nations.
Forex traders still utilize cable to symbolize the GBP/USD currency pair. One of the most regularly traded currency pairings, it is volatile and liquid.
Why Is Cable Important?
Beginner traders must understand cable since economic variables, geopolitical events, and central bank policies affect the GBP/USD currency pair.
Traders may benefit from pound-dollar exchange rate changes. Cable monitoring and analysis help traders decide whether to purchase or sell the currency pair.
Cable affecting factors
Many variables affect the GBP/USD exchange rate. Consider these crucial factors:
Economic Data: GDP growth, inflation, and employment may affect the pound, dollar, and cable exchange rate. Traders should follow economic announcements.
Central Bank Policies: BoE and Fed decisions may effect the pound and dollar. Changing interest rates and monetary policy may affect cable.
Geopolitical Events: Brexit and US-UK trade issues may cause cable volatility. Traders should follow news that may affect the two nations’ relationship.
Trade Cable
Beginners should follow these cable trading steps:
Research and Analysis: Study the aforementioned aspects and utilize technical analysis to find trade opportunities.
Beginners should practise on Forex broker demo accounts before trading with real money. This gives them experience without financial risk.
Select a Reliable Broker: Choose a trustworthy Forex broker with a simple trading interface, competitive spreads, and decent customer service.
Manage Risk: Keep your trading funds safe by establishing stop-loss orders and selecting position size.
Keep Learning: Trading requires constant learning. To improve your trading abilities, study Forex trading tactics, market analysis, and risk management.
Conclusion
Cable, the GBP/USD exchange rate, is important for Forex traders. Trading novices might benefit from understanding cable characteristics and how to assess and trade it. Always study, practice on demo accounts, and limit risk. Cable trading may be mastered with persistence and study.
Sources and Links
1. investopedia.com/terms/c/cable.asp
2. Babypips.com/learn/forex/cable
3. Dailyfx.com/gbp-live-rate