GBPAUD trading tips – How to trade British Pound / Australian Dollar
As a professional trader, have you ever thought about the best GBPAUD trading tips and tricks? Before embarking on this so-called adventure for GBP AUD trading, what is essential for you to know to work adequately?
Of course, the first thing you should know is that GBP is one of the most popular trading pairs on the foreign exchange market. It has a significant trading volume daily. Getting to know GBPAUD trading tips can be both challenging and fun since we are talking about the official currencies of the United Kingdom and Australia.
Even though the Foreign Exchange market is available 24 hours a day, UK’s trading is usually most active from 8 AM until 5 PM. Still, there will always be times during a single day when GBP/AUD Trading will experience high volumes. It will, most likely, be around significant market announcements.
In order to learn how to trade GBPAUD, you must get a basic knowledge of both currencies and their history. Let us begin with the British pound, also known by its name, the Pound Sterling, shall we?
GBP – Get to know the British pound
GBP is short for Pound Sterling. It is the official currency of the United Kingdom, the Isle of Man, Guernsey, Jersey, South Georgia, Gibraltar, South Sandwich Islands, Tristan da Cunha, and the British Antarctic Territory. It is subdivided into 100 pence, and the official symbol of it is £.
It’s interesting to note that GBP happens to be the oldest currency in continuous use. On the foreign exchange market, the British pound is the fourth most traded currency at the moment. It comes right after the US dollar, the euro, and the Japanese yen. As of 2021, the Sterling is the fifth most-held reserve currency when it comes to global reserves.
In order to understand the GBPAUD trading tips, you must also get a clear picture of what the Australian dollar represents.
AUD – Get to know the Australian dollar
The Australian dollar, or AUD, is the official currency of Australia. It’s also used in external territories such as Cocos (Keeling), Christmas Islands, and Norfolk Island. When it comes to its use, AUD is officially used in three independent Pacific Island states as a currency. They include Kiribati, Tuvalu, and Nauru.
The sign of AUD is almost without exception abbreviated with a dollar sign like this: A$ or AU$. It’s subdivided into 100 cents. It is sometimes used in order to distinguish in the form of dollar-denominated currencies. The famous $ symbol precedes the amount.
The brief history of GBP and AUD
The GBP has been around for a long time, dating back to 775. Since that year, Pound Sterling managed to evolve into the modern currency form as we know it today, following decimalization in 1971. At the moment, GBP is the 4th most traded currency in the FX market. It changes significantly daily.
On the other hand, the Australian dollar, or the AUD, became preceded by the famous Australian pound back in the ’60s. Australia has decided to replace the old imperial system and start using AUD. Since the country is very close to Asia, import and export between these two continents have impacted AUD very much over the past years.
Get all the essential GBPAUD trading tips
If you are wondering how to trade GBPAUD, there are several vital things you need to keep in mind. Any individual trader is able to trade the pound (GBP) to the Australian dollar (AUD) in two ways. The first is to use a Forex contract. Or you can use an alternative to exchange a contract for difference (CFD) on a particular currency pair. The second is to speculate on the price difference.
In order to get a clear understanding of it, a CFD represents a financial instrument that is most typical between a broker and an investor. In this situation, one party is willing to pay the other the difference in security value from the start to the end of the trade.
You, as a trader, can hold a long position and keep speculating that the price will eventually increase. Or you can hold a short position, where you’ll be speculating on the fall of the cost. Since CFDs tend to be utilized within a limited timeframe, this is considered a trade or a short-term investment.
How is speculating done precisely?
For example, if you’re interested in GBP/AUD trading using CFDs, you will speculate on the underlying asset’s direction. Two possible scenarios depending on what you’re thinking at that moment. The first one is if you believe that the pound will appreciate, then you must take a long position by purchasing the CFDs.
On the other hand, if you are 100% convinced that the Pound Sterling will definitely lose value against the Australian dollar (AUD), you’ll need to take a short position by selling CFDs.
The quality of trading depends on the quality of a Forex broker
Perhaps one of the essential tips among numerous GBPAUD trading tips for traders is to find a reliable and trustworthy Forex broker that will be more than valuable for your trading success in future days to come. Brokers represent financial services or companies that are providing traders access to trading platforms for foreign currency exchange.
A financial body will regulate a quality foreign exchange broker. Moreover, if it offers 24-hours customer service, strong educational material, good account features, and minimum deposit requirements, then you are safe. Make sure to do detailed research. Read reviews and brokerage forums in order to pick one of the best Forex brokers for your trading business.
Is GBP/AUD trading a good idea?
In conclusion, experienced traders know about the popular currency pairing of the British pound and the Australian dollar. It represents a significant quantity when it comes to daily trading. Keep in mind that GBPAUD pairing is extremely popular amongst newcomers and veteran traders alike.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. If you are interested in following the latest news on the topic, please follow Finance Brokerage on Google News.