What are the Major Forex Pairs to Trade?
There are 6 major forex pairs to trade from 200 countries and they form the biggest slice in the total volume of world forex trading.
Hence, these are the most liquid pairs which a newbie or even seasoned traders should be looking at as they give various opportunities to take up entry or exit positions.
However, some of these currency pairs may not have the potential to deliver the best results to traders.
So, what are the most popular forex pairs to trade? Keep on reading to find out the answers and more.
6 major forex pairs
The following currency pairs are the ones that have high liquidity. They contribute to the most bulk of foreign exchange transactions.
- (Euro / US Dollar) or EUR/USD
- (US dollar / Japanese Yen) or USD/JPY
- (British Pound / US Dollar) or GBP/USD
- (Australian Dollar / US Dollar) or AUD/USD
- (US Dollar / Swiss Franc) or USD/CHF
- (US Dollar / Canadian Dollar) or USD/CAD
The US Dollar
The most superior, strongest, and most traded currency is the US dollar. The US economy, which is the world largest provides the reason for this.
This means the US dollar is the preferred choice in most currency exchange transactions globally. It is the most powerful reserve currency in the world.
Thus, most major forex pairs include the US Dollar as the base or quote currency.
The best currency pairs to trade will be some major pairs like GBP/USD, EUR/USD, USD/JPY, and so on.
As a result, forex traders can take advantage of the major currency pairs’ low spreads that accurately represent the market value. So, these are also often the most traded currency pairs amongst beginners.
The values of these major currencies keep fluctuating in relation to each other, as trade volumes between the two countries change every minute.
These pairs are naturally linked to the countries that have greater financial/economic power, and the countries with a high volume of trade conducted worldwide.
Also bear in mind, economic data released on currency pairs, such as interest rates, economic growth or gross domestic product (GDP), inflation rates, unemployment rates and etc. will impact the prices of a trading pair.
Generally, such pairs are the most volatile ones, meaning that the price fluctuations that occur during the day can be the largest.
Does this mean that they are the best? Not necessarily, as traders can either lose or make money on the fluctuations.
If you select any of the currency pairs that will be discussed below, you will make trading much simpler for yourself, as lots of expert analytical advice and data is available on them.
Major forex pairs explained
USD/EUR can be regarded as the most popular forex pair. On top of that, this currency pair provides the lowest spread among world forex brokers.
This currency pair involves basic technical analysis. The advantage of this currency pair is that it is not overly volatile.
If you are a high-risk averse trader, then opt for USD/EUR. This could minimise your doubts.
You can also research plenty of information on this currency pair and such help can prevent you from making careless mistakes.
Profitable pips and probable huge jumps in the USD/GBP forex pair have mainly caused the popularity of trading in this currency pair.
However, higher profits come along with a greater risk. This currency pair belongs to the volatile currency group.
Nevertheless, many traders choose this pair as their preferred currency pair to trade. It is because a lot of market information and analysis is available online.
This is another favorite currency pair that can be seen traded regularly in the forex market.
USD/JPY comes with low spreads, and you can usually follow a smooth trend in comparison with other currency pairs.
This forex pair also has the potential of delivering exciting and profitable opportunities for traders.
All major currency pairs in the forex market have tight spreads. However, this excludes the USD/GBP currency pair as it is volatile.
It could be best not to trade the currency pairs that have high spreads. The recommended spread by the trading experts should be estimated at 0-3 pips.
If it exceeds 6 pips, the trading pair may turn too expensive. As a result, this can lead to greater losses. On the other hand, do not completely boycott everything with high spreads.
Always exercise risk management within your trading to safeguard your position.
Many major forex pairs are available for trading. Try trading in those found in the major forex pairs list. Then, you can choose a particular one to stick with.
Finding out the best currency pair to trade can be tricky. The best way to accomplish this is through hands-on experience.
Simply open a demo account with Tradehall, a meta-5 online forex trading platform. Start trading on the live market once you are ready, and you will be well on your way to success in the forex markets!