Has the GBPUSD always been King?

Hello,

I've been studying the Forex for a few months now after being in the stock market for many years. The GBPUSD is around 50% more volatile (ATR measurement) than the Euro, Swiss, and Yen. I looked at some historical charts and even when volatility was much higher across the board the Pound always had the largest range.

I also noticed that the GBPUSD trends better than any of the others. Sure...it has trading ranges but less than the other pairs and when it starts to move, there aren't usually too many "bad days" that could knock you out of your trend trade.

Has this always been the case?

It's weird because you hear so much about the Euro but I don't understand the fascination with it.

If I understand correctly, the British aren't too keen on the EU and I can imagine they don't like the Euro much either. Considering London is the financial capital of the world, could this negativity have something to do with the observations above?

For those of you who don't know, they have already started working on a North American Union (U.S., Canada and Mexico) and the early word is we are going to have the "Amero" one day.

Thanks,

Jeff

Did a google on the Amero. Shocking.


http://www.humanevents.com/article.php?id=15017

http://oldfraser.lexi.net/publicatio...ection_03.html

Excuse me this statement is not true....London WAS the financial capital of the world, but it has been removed from this seat since New York emerged as the new financial capital of the world...Regardless of everything, the amount of turnover in New York is extremely huge to that in London at any given day...

I am not sure about the GBP but I think it has been always like that...


Thanks,

Nader

Vegas mentioned in one of his method documents that the 'Swissy' used to be the big mover when he first started out. Went as far as calling 'cable' the new 'swissy'.

,Bundy

The news last week said London retook the capital. I'm not sure what metric they used to determine that.

I agree with bundyraider, cable is the most volatile pair now a days. Years ago swissy was much more volatile, but now cable is the most volatile no doubt.

I Think THe GBP/JPY is more volatile...

only i hate the spread

Cable is only more volatile in pip terms which is a simplistic way of looking at it. In percentage terms GBP/USD and EUR/USD have about the same volatility. A EUR/USD pip is worth more than a GBP/USD pip so if you put 5% or your equity on EUR/USD and 5% on GBP/USD and they both went up by 1% in a day then you would earn about the same profit in money terms even though in pip terms GBP/USD would have moved more.

What is cable? It sounds like it is a slang term for one of the currency pairs, but I don't know which one.

GBPUSD is referred to as "cable" because the prices used to be transmitted over the transatlantic cable in the days when telex (or telegraph or something) was the fastest way to transmit data over long distances. I guess it's still a cable, just a fibre optic one(?).

By the way, a pip on EURUSD has the same value as a pip on GBPUSD if you use the same number of units. But the margin required per pip is different, as is the spread.
So if you buy a single lot of each, you will get more movement on cable but it will cost you more in margin and in spread. On an ATR:spread basis, EUR is usually cheaper, at least if you use day ATRs.

As for cable being King, apart from in this simplistic sense of movement for cost, I certainly have an inkling what is meant and I've often wondered why it should be myself. There might be an element of the ratio of
retail to institutional trading, but that's guesswork. EURUSD might be the most liquid instrument in the world now.

waxwing you're right of course that one $10,000 lot will always equal one dollar per pip in both EUR/USD and GBP/USD but as I said if you were to use 5% of your equity on each then you would earn more for a EUR/USD pip movement than a GBP/USD pip movement.