How to trade currency pairs in forex - BestforexoffersNet

How to trade currency pairs in forex

Foreign exchange strategies and tips for upcoming pros. One of the first questions every how to trade currency pairs in forex trader asks is which are the best pairs to trade, which are easier to predict and analyze for beginners? Which one is the most suited for a beginner trader?

Before deciding which pair is better for you, let’s see how what types of pairs are there and how they differ. Currency pairs can be divided in three types: majors, crosses and exotics. Let’s have a closer look at the advantages and disadvantages of these pair types. Majors are the most traded pairs of the top economies of the world: USA, Europe, Great Britain, Japan, Switzerland, Canada. Main characteristics: Majors are the most accessible and convenient pairs to trade both for beginners and experienced traders.

They are the most traded pairs for a reason. Crosses, also known as Cross Pairs or Cross currency pairs are the currency pairs that DON’T have U. They are called crosses because in the times when most currencies were fixed to the U. For example if you wanted to exchange EUR to GBP you had to convert EUR to USD and then to GBP. Summary: Crosses are a good addition to the portfolio when you feel confident with a major pair and want to diversify your stakes. The spreads of the crosses are not as low as for majors but in average they are still not as high as those of the exotics which can reach even 15-20 pips. It is also quite hard and unsafe to trade them as the economic and political situation in the exotic or developing countries can be very unstable and unpredictable.

Commodity Currencies There is a subdivision of currencies called the commodity currencies. CAD is a typical commodity currency pair which is influenced by the price of oil which is a huge part of Canada’s export. JPY is also a commodity currency pair where Japanese yen’s rate goes down when energy prices rise. The problem with the commodity currencies is that they can be influenced also by false signals regarding the energy prices so there can be unexpected surprises. So which pair is best to start trading with for beginners?

USD as it has the smallest spread and there is a lot of information and analysis available on these currencies to make sound predictions on their value. USD as Great Britain is also part of the European Union. Forex Illustrated Forex illustrated provides reliable and independent information about foreign exchange market. Our aim is to offer insightful and useful analysis of the best tools and learning materials for mastering the skills of trading in a productive, fun and fast manner. Foreign Exchange involves risk, use caution.

Forex for Beginners Answering all your questions about Forex! What currency pairs to trade in Forex? These currency crosses are widely traded, thus providing liquidity which is needed in order to benefit from price changes. And finally, there are many Forex trading systems that are developed for trading those pairs and can be found online. Exotic and uncommon currency pairs should be avoided by novice Forex traders as some further knowledge is needed to trade such pairs successfully. Also novice Forex traders should try to avoid currency pairs which have high spreads. Spreads vary from broker to broker.

Currencies that have high spreads are more volatile, e. Also a common mistake done by many beginner traders is that they try to monitor too many currency pairs at once. Currency pairs do have their unique ways to move, react to economical events, form trends etc. By studying one currency pair at the time, Forex traders have the ability to observe its behavior and learn the ways to trade the pair even more effectively. USD – most popular pair with the lowest spread. This pair is an ideal choice for beginners, since it responds quite well to basic technical studies and rules, which traders learn in the beginning.

USD is not too volatile under normal market conditions and, thus, can be traded safely with lesser risks and closer stops. USD gets lots of global economic coverage, it is an easy to follow and monitor pair. JPY is another good currency pair. USD, which makes it attractive to investors.

JPY during trends a real joy, not to mention the fact of earning profits alongside. It is a pair often used for breakout trading. However, the risks here rise proportional to profit opportunities. USD requires further away placed stops. It belongs to volatile pairs group. USD, which makes it favorable among traders.