The Turkish lira has greatly dived for the last twenty years. Now, this asset generally demonstrates a downtrend. Massive inflation made the government carry out a currency denomination in 2005. A new lira was introduced into circulation. The move didn’t give the desired result, and the new lira was doomed to face the fate of its predecessor.
The currency pair is capable of steeply bouncing in different directions in the short and long term that makes this asset very risky for an average trader. That’s why it’s not recommended for novice traders to trade this wild pair. Approach this asset only with sufficient trading experience.
Seven hundred points for a day- that’s what you can observe when dealing with this currency pair. As you see, it’s hot-tempered. In this regard, it leaves behind many assets in the Forex market, with their miserable 120 points a day.
If you want to see the maximum activity for this asset, open its chart on Tuesday. The pair is quite calm on Monday.
To gain success with this currency pair, you are expected to ponder over the condition of the US and Turkish economies. Indeed, these nations have their distinctive features. The trade and services sector by 58% form Turkey’s GDP. 33% is allocated to the industrial sector. Chemicals, food, and textile are the most critical sectors of the Turkish economy.
The highly-developed Turkish agricultural sector is responsible for forming up to 9% of the ‘country’s GDP. Turkey is also known for its tourism. Those residing in CIS countries often spend their vacations in this country.
Indeed, the American economy outperforms the Turkish one in many regards. The evergreen buck boasts the status of the world reserve currency utilized for international payments — the trade and services sector forms about 80% of the American economy. The industry holds up to 19%, while the portion of agriculture accounts for 1.2%.
GBP/TRY, and EUR/TRY are the pairs USD/TRY relates to. The pairs often show synchronized moves. Exactly the Turkish currency is responsible for wild jumps in all these pairs.
Fundamental factors play a crucial role in this currency pair. To effectively trade this asset, monitor the release of key macroeconomic indicators from America and Turkey because any fluctuations in that data might provoke wild jumps in this currency pair. Furthermore, you should always keep an eye open on the trade balance and unemployment of these countries.
You can use both long-term and short-term trading strategies with this currency pair. The asset is suitable for scalpers. Due to its predictable bullish trend, you can make the most of the long-term policy.
Use technical analysis before opening a trading position. It will help you to identify the most suitable exit and entry points to the market. To timely derive gains and restrict losses, make use of take-profit and stop-loss orders.