This article explores how traders can effectively utilize the Allpips platform to profit from movement in the Aussie dollar versus the US dollar. Key topics covered include tools for technical analysis, strategies like day trading breakouts or swing positions, risk management techniques, order execution, and utilizing Allpips for both short and long-term to trade AUD/USD.
What is the AUD/USD Pair?
The AUD/USD currency pair sometimes referred to as “the Aussie”, tracks the value of the Australian dollar versus the US dollar. Australia and the US have very close trade ties so the pair typically moves based on commodity prices, interest rates, and economic data from both nations. The Australian economy relies heavily on exports like iron ore, so Chinese demand greatly influences the Aussie. Prices tend to rise when risk appetite is high and fall during risk-off periods.
AUD/USD is the 5th most actively traded currency pair globally due to its high liquidity. Trading volumes commonly range between $30-60 billion daily, allowing for immediate order execution with low spreads on platforms like Allpips. Tight pricing also means traders pay less in transaction costs compared to less liquid pairs. Its steady volatility and correlation to economic indicators make AUD/USD appealing for both short-term traders Capitalizing on intraday fluctuations and longer-term macro analysts.
What Tools Does Allpips Offer To Trade AUD/USD?
Allpips’ powerful web-based platform offers all the necessary tools for effectively trading the AUD/USD pair. Its core feature is multi-timeframe charts displaying currency movements from 1-minute to monthly scales. Technical indicators help identify trends, support/resistance levels, divergences, and patterns. Drawing tools layout analysis for easy reference.
Live news feeds keep traders up-to-date on economic releases affecting currency values. An economic calendar provides a forward-looking macro view. Real-time market quotes present accurate pricing to gauge optimal entry/exit points. Traders can set price alerts notifying them of breakouts.
An integrated trading panel handles order placement. Stop loss, take profit levels protect capital. Scalping small pips in volatile sessions or position trading over weeks becomes seamless. Advanced order types like “one cancels other” optimize strategies. Overall Allpips streamlines every step of analyzing and trading AUD/USD pairs.
How Can You Analyze AUD/USD On Allpips?
Thorough pre-trade analysis using Allpips equips traders to spot optimal trading opportunities. Examine daily, 4-hour, and hourly charts simultaneously to discern both short and long-term trends. Common patterns like symmetrical triangles, channels, and double tops/bottoms occurring across timeframes signal direction.
Moving averages like the 20, 50, and 200-day SMA are useful trend indicators. Crossovers foreshadow reversals. Stochastic, MACD, and RSI help identify overbought/oversold levels. Combine multiple indicators to confirm signals.
Traders should factor in supply/demand imbalances from technical points like Fibonacci retracements and key round numbers acting as psychological support/resistance. Watch order flow at these zones.
Economic data releases from both nations’ dockets also impact short-term volatility. Understand expected vs actual market reactions. Geo-political events can move the Aussie as well – analyze past price action during similar periods of uncertainty. Comprehensive analysis on Allpips arms you better for trading AUD/USD.
What Strategy Can You Use To Trade AUD/USD On Allpips?
A few effective strategies for trading the AUD/USD pair using the Allpips platform include:
- Day trading breakouts: Monitor 1-hour charts and set price alerts at resistance/support levels. Trade the initial 30-50 pip breakout in your favor pre-London fix for reliable volatility. Tight stops.
- Swing trading: Analyze daily charts for developments like trends, reversals, and candlestick patterns. Maintain positions for multiple days to capture 100+ pip moves.
- Scalping: Use 5-minute charts during high-impact events. Aim to capture 3-5 pips per trade using small position size and placing limit orders just beyond recent highs/lows.
- Carry trade strategy: When rates diverge for prolonged periods, go long the higher-yielding currency vs. the lower-yielding currency. Adjust using monthly charts on Allpips.
- Counter-trend trading: Identify overextended channels on 4hr/daily charts using indicators to enter counter-trend trades for 15-30 pips. Pay heed to risk management.
With practice, find the technique aligning best with your schedule, risk tolerance, and target returns for the AUD/USD.
How Can You Manage Risks Trading AUD/USD On Allpips?
Risk management is vital for sustained success in trading the volatile AUD/USD pair on Allpips. Set a maximum risk amount per trade based on account size, such as 1-2%. Use stop losses on all open positions. Monitor positions closely during high-impact news and Asian/London sessions presenting amplified volatility.
Diversify trades by not over-relying on one strategy or timescale alone. Limit single trade size to 1-5% of capital. Confirm signals using multiple indicators to help weed out false breakouts resulting in stops being hit.
When carrying open positions overnight, set tighter stops to protect against unexpected gaps. Consider reducing exposure during periods exhibiting elevated “fear index” readings like high VIX levels. Hedging strategies offset long vs short positions at times.
Abide by strict risk/reward targets per trade. For example, scalp 1:2 or position trade 1:3 risk-to-reward ratios. This enforces taking profits on half or a third of position size while letting runners play out. Monitor drawdown and cut losing positions sooner. Account equity curves prove patience and risk control triumph.
How Can You Execute Trades On Allpips?
Once a valid trading opportunity on AUD/USD using Allpips charts and analysis, executing entries and exits is straightforward. Choose market or limit orders based on prevailing liquidity. Decide the entry price relative to the area of interest like a level break, indicator divergence, or pattern target.
Place trades directly from the chart or with one click on the ticker window. Specify standard lot sizes or customize to your broker’s standards. Set stop loss and take profit levels accurately off the bat to lock in targets. Modify orders as required by right-clicking and dragging limits up or down.
Close positions partially or in full via the same methods. Manage multiple trades using the open positions window or trade tickets. The platform allows modifying close orders already in queues too without reentering. Book profits regularly to top up equity rather than becoming emotionally attached to runners.
Most importantly, verify optimal order placement using slippage statistics. Tweak entry techniques to secure the best fill prices given market conditions while removing any doubt or hesitation from trade executions. This streamlines the Allpips trading process.
How Can You Use Allpips For Long-Term Trading AUD/USD?
The Allpips platform likewise supports longer-term, swing trading strategies on the AUD/USD currency pair. Use weekly or monthly charts to analyze cycles, trendlines, and macro factors impacting currencies. Formulate trade ideas factoring seasonal patterns as well.
When viewing the bigger picture, events inducing currency valuations lasting quarters to years emerge like monetary policies, political leadership transitions, economic reforms, and commodities cycles. Search for divergences between charts suggesting a medium-term trend reversal may unfold.
Position size can expand for these trades given their longer duration. Set wider stop losses of 30-50+ pips from entry to trigger only in case of strong moves against your hypothesis. Trailing stops help protect profits as targets are reached.
Monitor positions less intensely yet check charts when important scheduled news approaches. Weekly review keeps strategies on track. Book partial profit between significant levels to realize gains yet maintain exposure if conviction holds. With a dedication to interpretation and capital preservation, Allpips empowers undertaking well-researched longer-term trades.
Conclusion | How To Trade AUD/USD Pair
The user-friendly Allpips platform provides everything needed to profitably trade the liquid AUD/USD currency pair using varied strategies from short-term breakouts to long-term macro setups. Comprehensive market analysis, execution, and risk controls maximize opportunities on this volatile, economically sensitive major currency pair.
