The best currency pair to trade forex in the market is a very important factor that must be considered by every trader. Of course, some pairs are popular and among the major currency and many traders tend to naturally want to trade those ones, even without a defined reason. That is not a good way to go about in the market. There are some factors that must be considered before choosing what pair that best for you to trade.
The best currency pairs in trading forex id determined by the following factors:
- Trading strategy
- Trade forecast
Some currency is very variable while some others are not. Variability in the market refers to the amount of uncertainty or risk involved with the size of changes in exchange rate. If the variability is high, it means the price of the security in question can change profitably or otherwise within a short period of time. If the variability is low, it means that the exchange rate of the security in question does not fluctuate irregularly and often.
MAJOR CURRENCY PAIRS
Major pairs or just major pairs are the pairs that are considered to be the most traded pairs in the market. These currencies are heavily traded and as a result, are considered a major driving force in the global market. Many other currencies are dependent on the outcome of these major currencies. The price movement determines the price movement of other minor currencies, either directly or indirectly.
Here is a list of currencies that are considered the most trades in the market:
- Euro vs US dollar
- US dollar vs Japanese yen
- Great British Pound vs US dollars
- US dollar vs Swiss franc
- US dollars vs Canadian dollar
- US dollar vs Australian dollar
As you may have observed, all the major currency listed above has US dollar. The US dollar is an internationally accepted currency. In fact, it is the most widely accepted currency in the world. To this end, it has a great potential in relation to other currencies in the world.
You do not have to be in the US to trade the US dollar in the market. Being that the market is decentralised; any trade from any part of the world can trade the US dollar or any other currency for that matter. It is not a bad idea for a new trader to consider trading any of the major pairs.