What Is The Best Currency Pair To Trade? Forex Pairs
If you are exchanging Swiss francs for US dollars, for example, the currency pair is CHF/USD. The pair is the two currencies involved in your trade. Forex pairs are always involfed in currency trading.
Trading is limited in most cases to the currencies of the larger financial powers, though theoretically you could trade any two currencies of the world. This does not mean necessarily the most powerful politically or the biggest countries. Because of the global importance of the Swiss banks, Switzerland for example a small country, is a major player in the financial markets.
90% of the funds traded on the forex markets are accounted for by 6 major forex pairs. These are:
- the euro and US dollar: EUR/USD
- USD/GPD: the US dollar and the British pound, because it used to be synchronized on both sides of the Atlantic by a cable running under the ocean is nicknamed Cable.
- JPY/USD: the Japanese yen and the US dollar.
the US dollar and Swiss franc: USD/CHF
- USD/AUD: the US dollar and the Australian dollar.
- CAD/USD: the Canadian dollar and US dollar
In the beginning it is best to stick with the majors. But some traders do get involved in other combinations of these major currencies or pairs that include other currencies such as the New Zealand dollar.
According to a 2007 study, the US dollar is the most significan single currency and is involved in 85% of trades. The euro is second at 37%. Next come the yen, pound, Swiss franc, AUD and CAD in that order. Because there are always two currencies in every trade, these add up to more than 100%
What Is The Best Currency Pair For A Beginner?
If you are just starting out in forex, most experts advise beginning with the EUR/USD pair. This is because there is a lot of information about these currencies and the high liquidity results in a smaller spread, so your costs will be lower.
Some of the other currencies have particular characteristics which make most newbies avoid them unless they have special knowledge. For example the value of the Canadian dollar is strongly influenced by the price of oil because Canada is an oil exporter. The Japanese yen can also be affected by the price of oil in the opposite direction because Japan is a large consumer and importer of oil.
The best thing to do when you are starting out is probably to take the EUR/USD market and stay with that for the first few months at least. Most new traders would choose the GBP/USD out of the major forex pairs for the second choice. You will not want to get involved in a lot of different currencies when you are starting out. - 23204
Trading is limited in most cases to the currencies of the larger financial powers, though theoretically you could trade any two currencies of the world. This does not mean necessarily the most powerful politically or the biggest countries. Because of the global importance of the Swiss banks, Switzerland for example a small country, is a major player in the financial markets.
90% of the funds traded on the forex markets are accounted for by 6 major forex pairs. These are:
- the euro and US dollar: EUR/USD
- USD/GPD: the US dollar and the British pound, because it used to be synchronized on both sides of the Atlantic by a cable running under the ocean is nicknamed Cable.
- JPY/USD: the Japanese yen and the US dollar.
the US dollar and Swiss franc: USD/CHF
- USD/AUD: the US dollar and the Australian dollar.
- CAD/USD: the Canadian dollar and US dollar
In the beginning it is best to stick with the majors. But some traders do get involved in other combinations of these major currencies or pairs that include other currencies such as the New Zealand dollar.
According to a 2007 study, the US dollar is the most significan single currency and is involved in 85% of trades. The euro is second at 37%. Next come the yen, pound, Swiss franc, AUD and CAD in that order. Because there are always two currencies in every trade, these add up to more than 100%
What Is The Best Currency Pair For A Beginner?
If you are just starting out in forex, most experts advise beginning with the EUR/USD pair. This is because there is a lot of information about these currencies and the high liquidity results in a smaller spread, so your costs will be lower.
Some of the other currencies have particular characteristics which make most newbies avoid them unless they have special knowledge. For example the value of the Canadian dollar is strongly influenced by the price of oil because Canada is an oil exporter. The Japanese yen can also be affected by the price of oil in the opposite direction because Japan is a large consumer and importer of oil.
The best thing to do when you are starting out is probably to take the EUR/USD market and stay with that for the first few months at least. Most new traders would choose the GBP/USD out of the major forex pairs for the second choice. You will not want to get involved in a lot of different currencies when you are starting out. - 23204
About the Author:
Author, T. O'Reilly has worked at forex trading for the past two years and is up to $363 per day. Find out how you can tooforex pairs. Click here: http://daytradingthecurrencymarket.com
posted by X - Men @ 4:54 AM
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