If you are giving your first steps in currency trading, then you have probably asked yourself what are the best currency pairs to trade. As usual, don’t expect simple answers on this matter.
First, a quick reminder about Forex trading. The currency market is open 24 hours, five days a week, therefore, it’s a great alternative for those with busy schedules. Also, as trading activity goes around the clock, you would be more exposed to profitable opportunities.
In case you are looking for fast-moving high-profitable trading, then liquidity and volatility should become your best friends from now on. But let’s be honest, that’s simply not for everybody.
But let’s go back to our main question: what are the best forex pairs to trade for beginners? Starting a trading career is not an easy thing to do. It requires time, practice and wel… money too. And that’s exactly why you should go for the secure choices rather than risking on advanced prospects. Here is a list of the three most popular trading pairs:
The EUR/USD pair stands for euro versus the US dollar. This pair two powerful currencies that account for most of international trade operations worldwide. That’s exactly why trading volumes tend to be very high and it would be strange to find yourself on a liquidity swamp.The EUR/USD displays a positive correlation with the GBP/USD pair and a negative one with other exchanges such as the USD/CHF or the USD/JPY. This pair is exposed to a large amount of data and events, as it involves the United States and the European Union. However, it’s rather simple to trade it as information is available on the go and without effort due to its popularity.
The GBP/USD combines the British pound with the greenback. Both currencies are strong, although sterling remains on top. The pair has a positive correlation with the EUR/USD and a negative correlation with the USD/CHF. This pair is usually tied to crude oil prices, as the pound is vulnerable to changes on the London-based Brent.
But not everything has to be in the US or Europe… the USD/JPY is another super tradable pair for starters that provides great opportunities for learning and profiting at the same time. The US dollar versus the Japanese yen is as a safe-haven asset that tends to increase as uncertainty scares global investors and drop as tensions ease. For that same reason, it can be a good addition to your portfolio.
The next most actively traded pair has traditionally been the USD/JPY pair. This pair has been sensitive to political sentiment between the United States and the Far East. The pair tends to be positively correlated to the USD/CHF and USD/CAD currency pairs due to the U.S. dollar being the base currency in all three pairs.