How to choose currency pairs on Forex?
Every trader, who opens a trading terminal for the first time, first of all selects the currency pair or several assets, which they consider the most suitable for trading,
As a rule, beginners prefer the Euro (EUR/USD) and other popular currency pairs, like GBP/USD, USD/Franc (USD/CHF), USD/JPY, but avoid Canadian, Australian, New Zealand and exotic currencies.
The choice of a suitable currency pair is a very serious matter, and there are hundreds of options, often conflicting with each other. Each trader will argue for the asset they have chosen.
However, every choice starts with familiarity. And for acquaintance without serious consequences the demo forex account from the reliable broker can be the best solution.
The price dynamics on Forex market varies during the day. The time of highest activity is called trading sessions, while the time in between is called the Intersession period. There are Asian, European and American sessions.
You may trade on currency pairs both during and after the session. Exactly how to trade depends on the trader's strategy.
An important characteristic of currency pairs is volatility, i.e. the range of price fluctuations during a certain period. This is one of the major parameters to be considered when choosing a currency pair.
An absolute champion in volatility is the British pound. The currency pairs GBP/USD and GBP/JPY are prone to sharp movements. One of the most stable currency pairs is EUR/CHF.
Those who prefer aggressive trading should choose volatile currency pairs, while those who prefer a calmer trading style should choose "more balanced" currency pairs.
Every pair has its own personality, and you will find some currency pairs that move in similar ways during certain periods. The most typical examples of currency pairs are GBP/USD and EUR/USD, AUD/USD and NZD/USD. It is risky to build a strategy using only allied relationships. The global trends of these currency pairs are very similar, while the formation of intraday price movements can be very different during the respective sessions, under the pressure of national news.
Another typical question is: "Which currency pairs will give the biggest profit? Here the answer is unequivocal: those that are the most understandable to the trader. Beginners and those who are planning to add new trading tools to their arsenal should first take a closer look at the nature of currency pairs that interest them. Demo and cent real accounts provide you with an opportunity to get to know each other, develop and refine your trading strategies without any appreciable risk.