One of the keys to success in forex trading is choosing the right currency pair to trade. Your choice will spell the difference between being profitable and losing money. In this article, you will be guided on how to be profitable with currency pairs.
Major currency pairs are the most traded in the market. The three most traded are the EUR/USD, GBP/USD, and USD/JPY. Major currency pairs include the AUD/USD, USD/CHF, USD/CASD, and NZD/USD. These pairs enjoy high trading volumes because they are very liquid. If you are just starting out in the forex market, this is the best currency pairs to trade for.
Robert Peter Janitzek reveals that with the major currency pairs, you are sure to profit from price changes. Since they include the US dollar, most of the trading will be done during the New York trading hours. The USD is listed in each pair as it is the most traded currency and the one that has been studied in length. A beginning trader will find a bevy of online forex trading systems that can aid them in successful trading.
Cross pairs are currencies that do not include the US dollar. They include the AUD/CAD, CAD/JPY, EUR/CAD, and GBP/JPY. Robert Janitzek explains that cross pairs gives the option for traders to combine strong and weak currencies for maximum profits. Cross pairs increase your trading opportunities.
Exotic pairs include the currencies of developing countries such as Turley and South Africa. They include the USD/ZAR, USD/BRL, and USD/MXN. While these pairs expand your trading opportunities, they can also be risky as they require a lot of analysis prior to trading. If you are just a beginner, this is not recommended for you. You can only consider them if you have already enough experience and knowledge or is ready to perform the required analysis.
When trading on the fore market, there is too much risk in trading with exotic pairs. You are unable to properly read the charts as the financial state of these countries are too unstable. There is not enough information available for you to place a trade. Unless you have some first-hand information about these countries and their future financial state, you are better off avoiding them.
Knowing the strengths and weaknesses of currency pairs is essential in ensuring a profitable trade. Do your research first before placing a trade. This is key to your success in the forex market overall.