Currency crosses, also known as cross currency pairs or crosses, are currency pairs that do not include the US dollar as one of the currencies. For example, the EUR/GBP, AUD/CAD, and CHF/JPY are all currency crosses. In this article, we'll explore what currency crosses are, why traders trade them, and whether it's a wise move to include them in your trading portfolio.

• What are Currency Crosses?

Currency crosses are popular among traders who want to diversify their trading portfolio and avoid the impact of the US dollar on their trades. Trading currency crosses can also offer traders the potential for greater returns than trading major currency pairs, as they tend to have more volatility and wider price movements.

• Why Trade Currency Crosses?

Trading currency crosses can provide traders with many benefits. First, they allow traders to diversify their trading portfolio and reduce their exposure to the US dollar. Second, currency crosses can offer higher returns than major currency pairs, as they tend to have more volatility and wider price movements. Finally, currency crosses can offer trading opportunities that may not be available in major currency pairs.

• Risks of Trading Currency Crosses

While there are many benefits to trading currency crosses, there are also risks that traders need to be aware of. One of the main risks of trading currency crosses is that they tend to have wider bid-ask spreads than major currency pairs, which can increase trading costs. Additionally, currency crosses can be more volatile than major currency pairs, which can increase the risk of price fluctuations and potential losses.

• Is it Wise to Trade Currency Crosses?

Whether trading currency crosses is a wise move depends on a trader's risk tolerance, trading strategy, and overall trading goals. Traders who are looking to diversify their portfolio, increase their potential returns, and take advantage of trading opportunities that may not be available in major currency pairs may find trading currency crosses appealing. However, traders need to be aware of the risks involved and take appropriate measures to manage their risk.

In conclusion, currency crosses are currency pairs that do not include the US dollar as one of the currencies. Trading currency crosses can provide traders with many benefits, including diversification, potential for higher returns, and trading opportunities. However, traders need to be aware of the risks involved and take appropriate measures to manage their risk. With a solid trading strategy, risk management plan, and dedication to ongoing education and improvement, trading currency crosses can be a wise move for forex traders looking to enhance their trading portfolio.