Choosing the best currency to trade in can be challenging, especially if you are a starter. Some traders with little experience pick the first pair that comes to mind without doing any research, only to find out the hard way that there are better ways to trade.
A currency pair is a quote that includes two currencies, one of which is called the “base” currency and the other the “quote” currency.
Most people who start trading on the Forex market lose all or most of what they start with. This shows how hard it is to trade on the Forex market.
When choosing the best currency pairs to trade, you should consider fluctuation, spread, strategy, and trading goals.
Because of their low liquidity, high volatility, high spread, and low safety, exotic currency combinations are not suggested for traders just starting.
EUR/USD
The most frequently traded money pair in the world is the Euro/U.S. dollar pair. This is the most-traded pair of currencies by big banks, funds, and other financial institutions, as well as by smaller players.
Thus, this mix of currencies is the most flexible. It has an average volatility and is supported by a stable economy.
GBP/USD
The cable, the British pound, and the U.S. dollar are other comfortable pairs for people starting. It moves faster and more directly, but it is less safe.
The tool gives you compelling market studies and pips that look good. The pair is very dangerous, so starting should be careful.
USD/JPY
Gopher is a term for how stable this pair’s trends are over time. Its price changes are smaller and more stable than those of other currencies.
This is a rare and profitable way to make money in the Forex market. It is the second most liquid instrument on the Forex market, with 17% of the total transactions.
USD/CHF
It’s usual for the Swissie to move against the dollar in the opposite direction of the pound and the euro, but this is still a central currency pair.
This combo is the easiest to understand out of all of them. But traders who only use fundamental study might find this pair hard to work with.
Due to the strength of the Swiss economy, forex traders often seek refuge in the Swiss franc when political and economic conditions are unclear.
USD/CAD
The duck on Canada’s one-dollar bill is where the name “loonies” comes from. Because the price of oil in Canada goes up and down, this mix is very volatile.
If Canadian oil prices go up, the Canadian dollar goes up, and if they go down, the Canadian dollar goes down.
Bottom line
The foreign exchange market continues to be the most important of all the world’s financial markets. Every day, more than $6.6 trillion changes hands. Thousands of new people join every day because there are many ways to make money there.
If you’re new to the forex market, find out which exchange pairs have the most profit potential. Before making any deals, traders should consider the different things that affect each currency combination. For investing to be successful, you need a well-thought-out plan and a way to deal with possible losses.
