Which Currency Pairs Should You Trade?

In the Forex market, the trading activity takes place with currency pairs. You buy one currency by selling another. The profit is realized through the difference in the currency pair prices which occur in the natural course of the market. There are many currency pairs. Basically, any commonly traded currency can be matched up with any other to create a pair to be traded. However, not all currency pairs are equal and some are better to trade than others. In this article I want to discuss which of the many currency pairs you should trade and why. King of the Hill The most heavily traded currency pair is the EUR/USD, or the Euro-Dollar. This pair accounts for a big chunk of the entire Forex market volume. You can make a lot of money by trading this pair alone. A lot of training products and system are actually focused on the EUR/USD alone. This pair offers liquidity and volume and it sets the tone for the entire market. 4 top Major Pairs But the EUR/USD isn't the only worthwhile currency pair you can trade. In fact, at the very top of the Forex market, there are 4 pairs which form the vast majority of trades and volumes. These pairs are the EUR/USD, GBP/USD, USD/JPY, and the USD/CHF. As you can, a total of 5 currencies make up the 4 top pairs (Euro, British Pound, US Dollar, Yen, and Swiss Franc) and the Dollar is present in all of them. There is a lot of sense in trading these pairs: they offer great liquidity so you will likely find a buyer for any transaction you want to make with these pairs. In addition, the spreads (commissions) on these pairs is usually very low. The brokers take a small spread because they can make up their profits in sheer volume. Trading less known pairs may carry with it a bigger commission which can eat into your profits. Other common pairs and au pair agentur deutschland While the top 4 are the most liquid pairs, 3 others are often referred to as major currency pairs as well. The AUD/USD, NZD/USD, and the USD/CAD are also pretty common and offer competitive spread rates as well. Other pairs are often referred to as exotic pairs. Unless you have a specific reason to do so, I don't think you should trade these. The commissions may be higher and you may find that they're not as liquid as other pairs.

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