Forex currency pairs: features, list, forecast and reviews. Best Currency Pairs for Forex Newbies - Which to Choose? The best Forex currency pairs
The Forex currency pair is the structure of quotations and pricing of currencies that are traded on the market. The currency value is a rate and is determined by comparison with another unit.
The first registered currency in the pair is called the base currency, and the second is the quote unit. The currency pair indicates what part of the quote's face value is needed to acquire one conventional unit of the base one.
All transactions on Forex imply the simultaneous purchase of one currency and the sale of the second, while the currency pair is considered as a single instrument that can be bought or sold. If you buy such a pair, you buy the base currency and implicitly sell the quoted one. The bid (purchase price) is the part of the quote currency that you need to buy one conventional unit of the base. Conversely, when you sell a currency pair, you alienate the underlying unit and receive the quote currency. The request (selling price) for a given pair is the amount you will receive in the quote currency to sell one base unit.
For example, if the USD / EUR pair is specified as the formula USD / EUR = 1.5, and at the same time you make a purchase, this means that for every 1.5 euros you sell, you receive (make a purchase) one dollar. If you sell such a pair on Forex, you will have one and a half euros for every dollar that you sell. The circulating currency quote looks like EUR / USD, and its value will be EUR / USD = 0.667. This means that you will receive 66.7 cents in US currency for 1 euro sold.
Major currency pairs on Forex
There are as many currency pairs as there are monetary units in the world. They are all classified according to the volume that is traded on a daily basis. The currencies that are bought and sold very often against the US dollar are called major currencies. These include USD / JPY, EUR / USD, GBP / USD, USD / CAD, AUD / USD, and USD / CHF. All of the above Forex currency pairs have very liquid markets that trade 24 hours a day every business day, moreover, they have very tight spreads.
What are the most popular currency pairs?
Of the entire list of major currency pairs, it is EUR / USD that is considered the most popular. It has the highest transaction volume. According to the opinions of the Forex market participants, more than 70% of trading operations in the world are concentrated on EUR / USD. However, this does not mean that 70% of all traders trade only the euro and the dollar.
Markets are not limited to what retail participants do. In fact, traders are a very small part of Forex. Big deals are made by large market participants such as central banks. Sometimes they do this not for the purpose of making a profit, but only because of their obligations. It is not uncommon for a country to have to sell its currency against another in order to reduce or control its value.
Some of the more popular pairs among retail traders are GBP / JPY and EUR / JPY, while GBP / USD is slightly less widely used. Moreover, the first is the most used, because it is the most variable. Trading these units is quite risky, especially when they are sold over a shorter time frame. The reason is that these are the most volatile currency pairs in Forex. Their trading signals are sharp and powerful, and they have a wide range of movement. Day traders trade GBP / JPY to make more profit, but this trade has mixed reviews because your losses can be serious.
Minor units
Currency pairs that are not associated with the US dollar are called minor or minor. These pairs have wider spreads, they are not as liquid as the main ones, but they are quite widespread. The cross-currency combinations that trade the highest volume contain one major currency. Some examples of such quotes include EUR / GBP, GBP / JPY and EUR / CHF (these are the quietest currency pairs in Forex).
Exotic pairs include emerging market currencies. They are not very liquid and their spreads are much wider. An example of an exotic currency pair is USD / SGD (US dollar / Singapore dollar).
Exotic currency pairs
Apart from the above, USD / SEK (Swedish krone), USD / DKK (Danish krone) and USD / NOK (Norwegian krone) are the most famous exotic currency pairs. Forex forecast for them is the most predictable, and deals are easy to plan. If you are trading one of them for the first time, you may run into difficulties when calculating your stop loss and making a profit. The stop loss, which should be placed above the previous candlestick, has several hundred pip values. But that shouldn't scare you. These pips are not like those you see in other currency pairs. Specialists call them mini-pips, they are about 1/10 of the value of regular pips.
This is not a complete list of Forex currency pairs that can be used to trade profitably. With a properly selected strategy, units of any country can be used.
What are the most liquid pairs in the world?
EUR / USD is the most liquid currency pair as it has the highest trading volume. However, you will not have any problems with other units as Forex is huge in scale. It is not like the stock market, where it is difficult to find a buyer for the shares you have purchased that you now want to sell.
Of course, there are two types of brokers. Liquidity can be a problem for true ECN or STP brokers. Other types of companies sometimes pretend to have liquidity problems. They don't actually send your trades to any banks, expecting better terms.
Buying and selling Forex currency pairs
The exchange rate reports the price at which the currency of one country can be exchanged for the unit of another. For example, the most commonly traded currency pair consists of the Euro and the US Dollar. It is always listed as EUR / USD and is never reversed.
Anatomy of a currency pair
The description of currency pairs on Forex can be presented as follows. The first currency in the pair is called the base currency, the second is the quote or counter currency. When published with the exchange rate, it is indicated how much of the quote currency is required to purchase a unit of the base. For example, EUR / USD = 1.5467. This means that for one euro, you can purchase $ 1.5467.
When selling a currency pair, the exchange rate displays how many units of the quote currency you will receive when you sell a unit of the base one. By applying these stringent standards for dealing with currency pairs, traders can more easily maintain exchange rates and clearly understand their meanings.
When trading currency derivatives, you are not trading the base, but trades with derivatives from that market.
Currency rates and spreads
Each Forex currency pair listed by your broker is accompanied by an exchange rate that indicates the price.
The offer price is the rate that your broker is willing to pay for a currency pair. In other words, this is the rate you get when you sell in the market.
The request price is the rate at which your broker is willing to sell a unit, that is, the exact value that you must pay to buy a currency pair.
The officially quoted rate is the spot price. However, in the Forex market, units are offered for sale at the placement (order) price, and traders wishing to buy a position tend to do so at the offer price, which is always lower or equal to the requested one. This price differential is called the "spread". For example, when the EUR / USD quote equals 1.3607 / 1.3609, then the spread is equal to 0.0002 US dollars or 2 pips. High liquidity markets exhibit smaller spreads than lower selling markets.
The spread offered to a sole trader with an account with a brokerage firm rather than large international Forex market participants is more significant and varies between brokerage firms. Brokers usually increase the value they receive from their market providers as compensation for their service to the end customer, rather than charging a transaction fee.
Trading positions
Long and short positions are just terms that traders use in trading, they have nothing to do with the length of anything. These are just conditions. Of course, usually market participants prefer to trade "longer" when the price rises and "shorter" when it is down. It has to do with simple human emotions. In the event of an increase in value, a Forex player is driven by the desire to get more profit, and in case of a fall - a feeling of fear of losing his money. Since the fear for your capital is higher than the desire to increase it, the price decreases much faster compared to how it rises. For this reason, when you buy any currency, a long trade is entered, because it may take longer for the value to rise. And when you sell, the trade position is shorter as it may take you less time for the price to come down.
How does it look in practice?
As an illustrative example, we can analyze the EUR / USD pair, traded at a quote of 1.33.
In the above case, whoever buys 1 EUR will have to pay 1.33 USD. Conversely, the seller of 1 euro will receive 1.33 USD (provided that there is no difference in rates). Traders buy EUR / USD if they believe that the euro will rise in value against the US dollar. This path is called a long position in a pair. On the contrary, a sale of EUR / USD, called a short position, will be made if the value of the euro is expected to fall against the dollar. The pair is depicted in only one way, its display does not change during trading. In this case, the buy or sell function is used at the beginning of trading. It is profitable for a trader to buy if bullish trends are observed in the first position, and sell if a bearish trend begins ahead.
The offer value is always less than the price because brokers pay less than they receive for the same currency pair. The difference, known as the spread, is a measure of how your broker is generating a significant portion of their profits.
For example, the rate is $ 1.4745 per EUR, while the request is USD 1.4746 per EUR. The offer price is always indicated before the request, and since the difference between the two prices is quite small, brokers usually only display the last two digits when specifying the request price.
Every trader can sometimes fall prey to failure. Loss of your deposit is a hard nuisance! And there are many reasons that can lead to losses. In order to prevent a second crash, you need to carefully analyze your actions and correct possible mistakes. One of these reasons may be an unsuitable currency pair for a trader. By replacing the pair, we fix the problem, but first we need to examine the “nature” of the instrument being traded.
Some people prefer to trade only the most active currency pairs and get good income from their volatility. Others choose only calm couples. But even the quietest and calmest couples can change due to the onset of some incredible events or natural disasters. Therefore, we will consider that the currency pair, which moves stably under normal conditions, is calm. Such currency pairs are most suitable for long-term transactions.
The comparison table shows the 7 major currency pairs, as well as cross rates and exotic currency pairs:
Examples of the most predictable (volatile) currency pairs in Forex are below.
EUR / CHF (Euro / Swiss Franc)
Moves calmly and not abruptly. This makes it possible to control the situation and generate income. Very well suited for beginners. Quiet periods for the pair are especially productive, and the spread is around 2 pips. Scalping traders most often choose the movement of this pair due to its minimal mobility. The calmness of this pair can be explained by the fact that both currencies that make up the pair are European. The Eurozone is the main trading partner for Switzerland, therefore the franc's exchange rate against the euro is very important for the country. As you study the development of this pair, follow the news from the Eurozone and the European Central Bank.
EUR / GBR (Euro / British Pound)
A very stable pair. Its movement can change by only a few pips, but this instrument has a very high pip price, which, with the smallest change, can greatly affect the deposit. This pair is easier to predict for a fall in the rate. This currency pair consists of two very popular currencies, the movement of which is influenced by similar factors, which sometimes leads to a fall or rise.
Most of all, the change in the EUR / GBR pair quotes may be affected by changes in prices for energy supplies, changes in interest rates of Central Banks, the amount of trade, economic growth and unemployment.
Volatility tables
Highly volatile, major Forex pairs:
Low volatility, major Forex pairs:
Highly volatile cross rates:
Currency pair | Volatility | Average spread | Price step | |
GBPNZD | 207.12 | 4 | 0.00001 | 0.1 |
GBPAUD | 183.14 | 8 | 0.001 | 10 |
GBPCAD | 168.52 | 7 | 0.00001 | 0.1 |
EURNZD | 159.50 | 10 | 0.00001 | 0.1 |
GBPJPY | 154.36 | 4 | 0.00001 | 0.1 |
EURAUD | 141.90 | 5 | 0.00001 | 0.1 |
EURCAD | 129.26 | 5 | 0.00001 | 0.1 |
EURJPY | 112.16 | 2 | 0.001 | 10 |
GBPCHF | 104.36 | 6 | 0.00001 | 0.1 |
CHFJPY | 98.68 | 4 | 0.001 | 10 |
AUDJPY | 91.00 | 2 | 0.001 | 10 |
Low volatility cross rates:
Currency pair | Volatility | Average spread | Price step | Cost of 1 pip per 0.01 lot, USD |
AUDNZD | 88.32 | 6 | 0.00001 | 0.1 |
CADJPY | 88.06 | 4 | 0.001 | 10 |
AUDCAD | 86.50 | 3 | 0.00001 | 0.1 |
NZDJPY | 81.20 | 4 | 0.001 | 10 |
AUDCHF | 71.30 | 4 | 0.00001 | 0.1 |
EURGBP | 68.88 | 2 | 0.00001 | 0.1 |
CADCHF | 63.84 | 4 | 0.00001 | 0.1 |
EURCHF | 50.12 | 3 | 0.00001 | 0.1 |
Speculators who trade on the Forex market use a variety of strategies to get profit.
Some traders prefer an aggressive trading style. This is often used. This makes it possible to get a decent profit in the shortest possible time. However, the likelihood of losses is also high here.
Other traders prefer to trade more calmly while minimizing their risks. As financial instruments, they use assets with low volatility, the range of fluctuations of which is minimal. Such financial instruments are perfect for beginners or speculators who prefer long-term trading.
Trading the calmest currency pairs on Forex is also characterized by minimal losses.
How to measure the calmness of a couple
Non-linearity of price movement on the chart is a feature of any market. Low volatility pairs in Forex usually move within a narrow corridor. They are often called "flat".
The figure shows a chart of the AUD / NZD pair. The price fluctuations of this asset are insignificant. It is no coincidence that this currency pair is considered one of the most calm.
To determine volatility, investors often use special tools, such as a volatility calculator. At the top of it, for the calculation, you must specify the time period in weeks, and then select the asset. After that, you can observe the result presented in three diagrams.
The volatility of even the calmest currency pairs on Forex rises during the period of important economic news. Any trader should take this into account. Therefore, it is better for beginners to trade low-volatility assets at this time not to open positions.
The lowest volatility on the market is observed from 2 am to 4 pm Moscow time. This is the gap between trading sessions.
It should be noted that many “calm” assets are difficult to identify. This happens for the simple reason that the lowest volatility currency pair can become extremely active at any moment and vice versa. An example would be USD / CHF.
It was considered calm until the date of the introduction of changes in interest rates by the Swiss Central Bank (). After that, the price movement of USD / CHF changed.
Which pairs can be considered the most flat
A horizontal or sideways price movement in the market is usually called a flat. The longest time period for being in a flat is typical for cross assets. These are the pairs in which the US dollar is absent. They are not characterized by sharp jumps.
On the CHF / JPY chart, the price movement in the sideways direction is clearly visible. Extremes (lows and highs) are practically not updated. In this example, the width of the corridor is about 50 points.
Some of the most flat currency pairs are considered to be GBP / JPY, EUR / JPY, CAD / CHF, EUR / GBP, AUD / NZD. Of these, assets with the US dollar stand out the most. Examples include AUD and NZD.
Charts of rates of both currencies in tandem with the "American" behave almost identically. The stability of the AUD / NZD can be explained by the fact that both currencies that make up the asset are subject to the same factors. Consequently, there are much less reasons for a sharp change in price movement here than in other financial instruments.
Features of trading flat pairs
It is believed that the optimal trading style during a flat is to enter sells at the upper border of the price channel, and buy at its lower border.
But when opening orders at support and resistance lines, one should take into account the size of the asset's spread so that the final profit exceeds it and is economically justified. Otherwise, it makes no sense to enter the market.
For long-term trading, the least volatile currency pairs are suitable, the daily chart of which for a long time stays in a certain price corridor, outwardly close to the "sideways". This makes it possible to place pending orders for the implementation of short and long positions, spending much less time at the trading terminal.
Flat pairs are ideal for automated trading, as robots and EAs work well in such conditions.
In the conditions of manual trading, it will be useful to use technical indicators. Sooner or later, the flat movement ends. Indicators and careful tracking of the most important economic news help to determine it.
When trading the calmest currency pairs on Forex, you should always keep in mind the rules of money management. Even with a moderate risk, you should not neglect the rules of money management.
The choice of a trading instrument is no less, but rather even more important for the overall profitability of a trade than a trade opening strategy. In the context of the forex market, we are talking primarily about currency pairs. Which are radically different in trading volume, volatility, daily price range, spreads, key influencers and much more. Some tools are better for long-term strategies, some for scalping. But we will consider currency pairs, we will comprehensively indicate their specifics. Pairs are subjectively arranged, naturally, for each trader, the top instruments will look individually.
No. 1. EUR / USD
Unconditional first place both in terms of the volume of trading operations and liquidity of both currencies from the pair. Low risk of speculative volatility, significant daily range and adequate response to fundamental factors create a comfortable trading environment. And low spreads for the pair allow you to make even the shortest-term entries.
No. 2. GBP / USD
In principle, all theses indicated for the Eurodollar are relevant, adjusted for the popularity and trading volume. This instrument is more volatile than the dollar-euro pair, and is perfect for more aggressive traders. The pound reacts much more sharply than the euro to exclusively dollar factors, which makes it possible to get additional points on the same momentum.
No. 3 USD / JPY
Traditionally it is considered one of the most unpredictable, but at the same time the most profitable currency pair for people who understand the intricacies of its trading. The peculiarity of the instrument lies in the regular interventions by the government in the quotes of the national currency. Perfect for experts in fundamental analysis.
No. 4 USD / CHF
It is rightfully considered the best currency pair for flat trading lovers. Trends are very rare and even less often last more than two weeks. Most often, the trend in a pair is caused by dollar factors. The pair brings quite good income to adherents of trading off levels, as well as to traders who use stochastics and oscillators in their strategies.
No. 5 USD / CAD
A feature of this currency pair is the relationship between the economies of the United States and Canada. It is for this reason that the instrument, when significant fundamental factors appear from one side or the other, forms very beautiful trend segments. Also, when trading, it is worth considering the time zone factor. Active trading and good volatility are observed only during the American trading session.
No. 6 AUD / USD
The Australian dollar is the sixth most traded currency in the world. Traditionally, it is customary to refer an instrument to trend pairs, but if we talk about long-term positions, the chart has been in a conditional flat since 2015. Swaps are quite tangible for long-term positions, so you should be very careful when opening long-term sales.
No. 7 NZD / USD
The last pair from the so-called group of "major". It correlates very strongly with the previous pair and is similar to it in terms of analysis features. There is also a very strong dependence on metal quotes and political events. Qiwi is considered to be one of the most trending currencies in the world. The periods of the vector movement of quotes significantly exceed the periods of accumulation in terms of frequency of occurrence.
No. 8 EUR / GBP
The most popular pair in the cross category. Differs in a unique manner of quotation movement. There are two distinct periods in the movement of the instrument: a clear flat with obvious support and resistance levels and very sharp ups / downs. Other types of movement are quite rare. The currency pair allows you to open positions for both breakout and pullback of levels with approximately the same probability of triggering.
№9 EUR / CHF
Another pair representing currencies from closely related economies. Factors influencing quotes, the logic of movement, as well as the factor of the dominant trading session makes the instrument very similar to USD / CAD. And the low key rate in Switzerland makes it possible to profitably implement the "Carry Trade" strategy.
# 10 AUD / NZD
Due to the fact that the same factors act on both the base and the quoted currency, the instrument is rightfully considered one of the most stable and predictable. But this does not prevent the pair from reaching the daily movement of 100 standard points. The main disadvantage of the pair is the very high spread, which, depending on the broker, fluctuates between 15-25 points.
For beginners who have come to the foreign exchange market, in addition to many questions, they are also interested in the following: "What are the best currency pairs for getting started on Forex?" Most analysts recommend GBP / USD for newbies - traders, while not taking into account other trading instruments, and there are a lot of them.
Of course, in some ways they are really right - when trading on Forex, it is better for beginners not to immediately scatter their own attention to all the existing currency instruments of the market, but knowing their characteristics is not only necessary, but also important.
The best currency pairs most suitable for beginners, an introduction
In addition, it should be understood that currency pairs are the individual preferences of each of the traders, and their choice depends on a huge number of various factors affecting the market, as well as on the psychological characteristics of the beginner himself. For this reason, each beginner must decide on his own which are the best currency pairs to choose for trading while taking into account the experience of other traders and their preferences at the same time.
Trading terminals in the window " Market Review", As a rule, reflect about 20 trading instruments, and before excluding superfluous, in your opinion, currency pairs, you need to make sure that the decision was made correctly.
To choose the best currency pairs, the first step is to determine their basic properties and only then proceed to any specific actions.
Properties of currency pairs in Forex trading
So what are the properties of currency pairs? So, volatility is the range of price movement over a certain period of time. Sometimes you can find another name for this property - dynamism.
The greater the volatility of a currency, the faster its price will change, which means that you can earn more due to exchange rate movements. But keep in mind that the greater the volatility, the more risky trading is.
The next property that beginners need to know about when choosing currency pairs is their liquidity. In other words, both supply and demand should apply to the currencies of this pair. Note that and depends on the liquidity of a particular currency pair.
An important role for beginners when choosing currency pairs is their predictability. The easier it will be for you to determine what will be the reaction of this or that financial instrument to any events, the higher its predictability will be.
In addition, it is very important to receive all the necessary information on this instrument. As a rule, the most popular in trading have good predictability.
But, and the best currency pairs for learning Forex trading are (according to most experienced traders)- NZD / USD, AUD / USD and XAU / USD.
The reason for this is simple - good predictability (the first two of them will rise in price when the dollar falls, and the third relates to precious metals trading and reacts very well to all kinds of news.
If you want to get maximum profit when trading Forex, then use more dynamic currency pairs - EUR / USD, GBR / CHF, GBR / USD, GBR / JPY and USD / CHF. Some of these currency pairs are capable of traversing at least 200 points in one trading day, which in terms of a volume of 1 lot is at least $ 2,000.
At the same time, we note right away that when choosing currency pairs for trading, you should not focus your attention only on the most popular of them - experiment, because, as mentioned above, each trader must choose exactly the pair that will at least correspond to his preferences and. To do this, you need to know the main characteristics of these trading instruments, which we will discuss below.
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Best Currency Pairs for Forex Newbie Traders
Of course, today the most popular currency pair is EUR / USD. But at the same time, this pair of currencies during its movement carries a huge number of surprises and only at first glance, it seems that these movements are obvious and simple. The reason for this, again, is its popularity - this pair is traded by a huge number of professional traders, so its behavior can sometimes be simply unpredictable (trends can change literally several times in a matter of hours). But if you are confident in yourself, then you can masterfully deal with this currency pair. The next pair USD / JPY, in terms of the volume of traded transactions on the exchange, takes the 2nd place. This currency pair is considered by many to be the most unpredictable and insidious of all. According to it, at any moment, unexpectedly, a sharp jump may occur, which can lead to both large profits and not less losses. But at the same time, USD / JPY is extremely sensitive to various world events in terms of politics and economics. It is also called the litmus indicator of what is happening in the world, so it will not be easy for beginners to trade this pair, but there is always a chance. The GBP / USD currency pair is known among professional traders as "cable" (jarg.). It is famous for its strong enough and very sharp movements. In addition, false ones very often occur for this pair, this must be taken into account when making any trading decision. For beginners, on the other hand, the GBP / USD currency pair is moderately difficult. Therefore, you can safely choose it to start trading on Forex, despite the fact that the forecasts of the behavior of this pair of currencies come true almost always. Two very stable in forecasts and similar in their behavior pairs: AUD / USD and NZD / USD. They are known in trading as "kangaroo" and "kiwi". Both one and the other pair lend themselves well to technical analysis. For beginners who have chosen one of these pairs for Forex trading, it will be very important to listen to the opinion of technical analysts and themselves in the process. Also, one of the main currency pairs for beginners is the USD / CHF pair, since the forecasts for it are the most successful in comparison with other currency pairs. But we note right away that when trading Forex with this pair, knowledge of technical analysis alone will not be enough, it is necessary to use and. For beginners, USD / CHF is considered the most suitable, but not the most comfortable in trading with some strategies. The USD / CAD pair is somewhat specific, since reacts strongly to the price of "black gold", i.e. oil. As soon as the price of oil starts to rise, then the CAD starts to rise in price, and vice versa. For beginners who are going to use this pair for trading, it will not be superfluous to study the trend in world oil prices, as well as not forget about technical analysis.We also note that the most successful forecasts for this pair of currencies are from American analysts, remember this and listen better to them, and not to others.
There are also other currency pairs with which you can start trading on the foreign exchange market, but we have considered only the best of them.
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The best currency pairs suitable for beginners
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