Forex – Forex Killer – eBay – Sky High Auctions – Succesful Online Businesses and other money making opportunities. » What Is The Best Currency Pair To Trade? Forex Pairs

Forex pairs are always involved in currency trading. The pair is the two currencies involved in your trade. For example if you are exchanging US dollars for Swiss francs, the currency pair is USD/CHF.

Theoretically you could trade any two currencies of the world, but in practice most foreign exchange trading is limited to the currencies of the larger financial powers. This does not necessarily mean the biggest or most politically powerful countries. Switzerland for example is only a small country but is a major player in the financial markets because of the global importance of the Swiss banks.

Between them, there are 6 major Forex pairs which account for 90% of the funds traded on the Forex markets. These are:

- USD/EUR: the US dollar and the euro

- GBP/USD: the British pound and US dollar, nicknamed Cable because it used to be synchronized on both sides of the Atlantic by a cable running under the ocean.

- USD/JPY: the US dollar and Japanese yen.

the US dollar and Swiss franc: USD/CHF

- USD/AUD: the US dollar and the Australian dollar.

- USD/CAD: the US dollar and Canadian 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.

The most significant single currency is the US dollar and according to a 2007 study, 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. These add up to more than 100% because there are always two currencies in every trade. In case you were wondering.

What Is The Best Currency Pair When You’re Just Starting?

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.

Unless they have special knowledge, most newbies avoid some of the other currencies because they have particular characteristics which make them unpredictable. For example Canada is an oil exporter so the value of the Canadian dollar is strongly influenced by the price of oil. Because Japan is a large consumer and importer of oil the Japanese yen can also be affected by the price of oil in the opposite direction.

You will not want to get involved in a lot of different currencies when you are starting out. The best thing to do is probably to take the EUR/USD market and stay with that for the first few months at least. GBP/USD would be the second choice of the major Forex pairs for most new traders.

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