With some currencies showing high growth, there are foreign currency pairs that grow alongside them as investment instruments. The forex market is now filled with pairs with relatively high volatility and plenty of opportunities to bank profits, and one of those pairs is EUR/ZAR.
EUR/ZAR pits the growing economy of South Africa with the more mature fundamentals of Europe. With every pip valued at around $0.7 per lot, there is a lot of room for risk-taking and a more aggressive investment strategy.
So, is EUR/ZAR a good pair to trade? The answer to this question is yes, and we have just the tips to get you started in this article.
Get Busy at Trading Times
Here’s the first thing you need to understand about EUR/ZAR: it is traded the most in the European market. This means you can enjoy maximum market movement and seize more opportunities during London’s trading hours.
There are plenty of opportunities. On a busy day, you can expect to see EUR/ZAR swinging from around 16.9000 to close to 17.0000, a movement of 100 pips either way. Since each pip is valued at a modest amount, you can aim for higher target profits with every trade.
Use the Right Risk Management Strategies
You cannot use the same set of trading rules and tactics you use with EUR/USD when trading EUR/ZAR. The latter offers more flexibility when it comes to risk management, mainly because you are not risking a lot with every market movement.
This, in turn, allows you to be more agile with how you approach the currency pair. You can incorporate averaging and hedging in a more flexible way, knowing that you will not get margin called should the market take longer to recover after a shift in direction.
Risk management also means limiting your trades with the currency pair you trade; Easy Markets make managing your risks easy. With a relatively limited starting capital, you have more options when it comes to the size of your positions. You can, for example, trade more than 10 lots with the right margin and leverage.
Check the Fundamentals
News and announcements on the South African economy are still very important. They tend to affect EUR/ZAR market movement in a substantial way, so you want to pay close attention to your charts before a big announcement.
Jumps are not extraordinary. However, seeing a pattern and understanding the general direction to which the market is moving isn’t that difficult at all. Add the fact that you are dealing with a very reasonable spread with most reputable brokers, and you have the perfect pair to explore.
That’s another important thing to keep in mind: explore! Unique pairs like EUR/ZAR are always fascinating to explore whether you are a seasoned trader or a beginner. Regardless of your starting bankroll and your investment goals, you will find trading EUR/ZAR to be very manageable and incredibly profitable.
Besides, you already have the top tips and tricks we covered in this article. All you have to do now is get started with your own positions in the market.