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Currency Pair Trading: 3 Ways to Trade GBP/USD



As the third-most popular currency trading pair in the world, GBP/USD offers one of the most liquid forex tradings you can expect to find. That comes with many of the expected characteristics of a pairing traded at a high volume, including narrow spreads, high volatility, and opportunity to carve out strong profits with well-timed positions.

Thanks to the stability of the economies in both the United States and Great Britain, GBP/USD is also one of the safer currency pairs to trade in. Meanwhile, the popularity of this pairing means there’s no shortage of information and resources available to help guide your trading decisions, regardless of your forex experience.

Still, traders should be careful when planning GBP/USD trades. Because the currency pairing is so popular among traders, particularly as a safe-haven option to place liquid assets, it can require a studious eye and patient temperament to create strong opportunities. Here are three events and factors to consider when timing your GBP/USD trades.

Trading Around Political Events

Political events can produce a direct impact on economic movement in currency markets, thus affecting investor confidence in assets tied to those nations. Recent political upheaval in Britain is a prime example.

When the Brexit referendum first passed, for example, it caused a sharp drop in the value of GBP. Today, news and events coming from British politics, including new revelations related to Brexit, continue to trigger fluctuations in value for the GBP/USD pair.

This political influence runs both ways: Election cycles in the United States can similarly impact USD value, thus affecting the GBP/USD pairing. Also, news such as proposed nominations for head of the U.S. Federal Reserve, as well as overhauls to American tax policy and trade relations with other nations, can trigger movement in GBP/USD value.

Traders should also pay attention to reports from federal banks concerning interest rate changes in either country, which can create volatility in currency pairings and lead to swift profits or losses, depending on your trading position.

Economic Factors to Leverage in Trading

Both Great Britain and the United States provide regular reports on economic factors such as job growth, GDP, labor productivity, and other metrics used to interpret the relative strengths of their economies.

Traders with a keen understanding of these economic factors—and their impact on currency values—may find success following these updates and timing trades around each country’s economic reporting schedules.

For example, the U.S. Bureau of Labor Statistics typically releases its monthly jobs report within the few first days of every month. The department publishes each month’s release date on its website, thus making it easy for traders to circle that day on their calendars if they rely on this information as part of their analysis strategy.

Best Window for Day Trading

GBP/USD’s prime trading window is closely aligned with the opening of the markets in New York and London, thus making it easy for traders to know when to time their trades. Typically, the best trading action and price movement is found between 8 and 10 GMT, as well as from 12 to 15 GMT.

More generally, 6 to 16 GMT is an acceptable window when traders are more likely to find advantageous prices and trading action, but the best opportunities are historically found in those tighter trading windows. This also means that trade activity outside of these peak hours tends to lack the characteristics of a good trading opportunity.

In most cases, traders should consolidate their GBP/USD trades into the most lucrative windows possible and steer clear of trading activity taking place outside of traditional market hours.


As one of the most popular currency pairs in the world, GBP/USD attracts a lot of activity from casual as well as seasoned forex traders. To create revenue opportunities within this crowded field, traders should test strategies for both the timing of their activity and the market factors they consider when evaluating a trade opportunity.

By using a combination of chart analysis, trends, and other indicators, traders can leverage GBP/USD opportunities in ways other traders might overlook.

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The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.

This post was written by Graeme Watkins

CEO Valutrades Limited, Graeme Watkins is an FX and CFD market veteran with more than 10 years experience. Key roles include management, senior systems and controls, sales, project management and operations. Graeme has help significant roles for both brokerages and technology platforms.