I start the blog by discussing major Forex pairs.
There are a lot of currency pairs that you can speculate on, but it is
important to find the ones that fit your trading style best. Why? Because,
volatility, turnover and volume vary in those pairs and various market
participants trade those. So, each pair can behave differently and so you
should trade them accordingly. Before we go on to major Forex pairs I have to
say that there exist so called minor or crosses that as I have said have much
smaller volume, but can still present you with a lot of opportunities. But I
will talk on the crosses in my next post. So what are the majors? Let us take
them one by one.
The
king of Forex: eur/usd pair
This is considered one of the best pairs and it gets
the biggest turnover in the market. Some statistics in the past said that it
takes around 34 percent of transactions of all market volume. That is why it
can be called the king of Forex. The pair can be easily analyzed both
fundamentally and technically.
The
second spot for: usd/jpy
It is very volatile pair and not so orderly as
eur/usd. You can see a lot of choppy price action in Dollar Japanese Yen pair
daily. Statistics say that it takes around 12 percent of all transactions in
the Foreign Exchange Market. So, you can easily trade a lot of standard lots in
the pair and just as easily get out of your positions as you got into them.
The
bronze medal for: aud/usd
It is strange, because I thought that it should go
to gbp/usd, but I was wrong. So, Australian Dollar and US Dollar pair gets 11
percent of all market orders. It is also rather choppy like usd/jpy pair, but
forms very nice ranges and you can trade reversals at the tops and bottoms.
The
fourth place is for: gbp/usd
A lot of traders like Pound pairs, because they are extremely
volatile. British Pound and US Dollar pair gets about 9 percent of volume in fx
market. It is second best to eur/usd in terms of technical patterns and the way
it moves.
Fifth
place for: usd/cad
Canadian dollar is probably the champion of choppy
price action. I hardly ever trade it. However, it gets about 7 percent of
market volume daily. Quite a thing!
Sixth
place for: usd/chf
US Dollar and Swiss Franc pair very much resembles
price action of eur/usd. We can say that whatever happens to eur/usd will also
happen to usd/chf. So, if you do not like eur/usd, you might consider usd/chf
for a change. It gets about 3 percent of daily market volume.
Seventh
place: nzd/usd
It gets much smaller volume and is usually placed
together with currency crosses in terms of volume, but as it is US dollar
denominated pair it is among the majors. It forms nice trends and often goes
shoulder to shoulder with aud/usd pair.
Next time I will cover some of the main Forex
crosses. Well, maybe all of them!
