GBP/USD is one of the most traded currency pairs on the forex market. It is one of the most liquid and volatile pairs, which presents traders with a lot of profitable trade opportunities. 

Many traders use GBP/USD as part of a diversified forex portfolio because it tends to have a different risk profile compared to other currency pairs, such as EUR/USD and CHF/USD. 

The pair represents a significant portion of global trade and finance. The British Pound (GBP) is a major reserve currency, and the U.S. Dollar (USD) is the world's primary reserve currency.

Historically, the British pound has been stronger than the U.S dollar. However, it must be noted that the post-World War II period has seen the pound lose some ground to the greenback. 

As of September 29, 2023, the exchange rate of GBP/USD was 1.2235.

How To Trade Cable In Forex

Gaining exposure to the cable in forex is a quick and easy process. All you will need to do is open and verify a forex brokerage account and deposit the amount of funds that you would like to trade with. After that, find the GBP/USD pair and decide what your strategy will be and at what price you are willing to enter the market. 

Consider the rates of inflation for each currency and the interest rates set by the Federal Reserve and the Bank of England to better gauge the possible long-term direction of the pair. 

The cable, or GBP/USD, comes with its fair share of market risks and opportunities and traders need to be aware of these factors to avoid losses and make the most of opportunities as they arise. 

Pros

• High Liquidity: GBP/USD is one of the most liquid forex pairs, ensuring that traders can easily enter and exit positions with minimal slippage. High liquidity means more competitive spreads and fewer trading restrictions
• Volatility and Trading Opportunities: The pair often experiences significant price movements and volatility, providing traders with frequent trading opportunities. News events, economic data releases, and geopolitical developments can lead to sizable price swings
• Diversification: Trading GBP/USD can be a way to diversify a forex trading portfolio. It has a different risk profile compared to other currency pairs, potentially allowing traders to spread risk effectively

Cons

• Volatility and Risk: While volatility can present trading opportunities, it also entails higher risk. Sharp price movements can result in substantial losses if traders do not use proper risk management techniques like stop-loss orders
• Market Sensitivity: GBP/USD is sensitive to political developments, economic data releases, and central bank policies in both the UK and the U.S. These factors can lead to sudden and unpredictable price shifts
• Time Zone Challenges: Traders in different time zones may need to adapt their schedules to effectively trade GBP/USD during its most active hours, which often align with the London and New York trading sessions. This can be challenging for traders in distant time zones

• Cable is a term that is often used by forex traders and professionals to refer to the GBP/USD currency pair 
• The term comes from the transatlantic cable used to transmit the exchange rate of the pair 
• GBP/USD is one of the most liquid and volatile currency pairs on the market, and one of the four major pairs in forex trading
• The pair is most active during the London and New York trading sessions