It is fundamental to understand what forex currency pairs are if you intend to venture into forex trading. First, forex is all about the exchange of currencies, which is done in pairs. As we are going to see, there are certain pairs that are commonly traded, especially because both are strong and stable.
So, would you like to understand more about forex currency pairs? Well, this article will cover helpful insights that you need to comprehend as a beginner.
What Is a Forex Currency Pair?
This can be simply put as two currencies that are traded against each other. One is called the base currency while the other is the quote currency. Then there is the exchange rate, which determines the pair’s worth. As a beginner, it is good to approach the forex currency pairs with caution to understand all the relevant information about them and make informed decisions. Better still consult a professional or use a tool to help you analyze each pair and the pros and cons of trading the set.
Most Traded Forex Currency Pairs
As you research more about forex currency pairs and trading from informative websites such as Forexline, you will realize that some pairs are very popular to trade. Here is a list of the popular options to start with.
· Euro and US dollar – Experts say that this pair offers stability, a low spread, and high liquidity because the European region and the US are major players in the economic landscape.
· Euro and British pound – In the same way, there are strong economic ties between European countries and the UK, making this pair very popular. It also offers stability and liquidity to forex traders.
· British pound and US dollar – This is among the most common and oldest forex currency pairs, and experts in the industry call it “cable” because of the undersea cable that connected trading between the two regions.
· US dollar and Japanese yen – This pair is highly sensitive to geopolitical events, despite having high liquidity.
· US dollar and Canadian dollar – Before wrapping up the list of the top forex currency pairs, it is worth mentioning this one. It is strongly influenced by oil and other commodities traded between the two countries.
How to Succeed in Trading Forex Currency Pairs
Forex traders must navigate various challenges to succeed in trading such as understanding the ideal times to trade forex currency pairs. By now, you know something or two about these pairs from the insights shared in this article.
However, it is wise that you create a strategy and plan to do forex trading like a professional. The good thing is that there is a lot of information to help you make the right decisions, particularly if you know how to embrace the digital space.
Staying disciplined is also another way to succeed in working with forex currency pairs. Typically, you should avoid emotional decisions as they can lead to hefty losses.
Understanding everything about forex currency pairs requires a lot of time and dedication whether you are doing research, using trading tools, or even consulting forex trading experts. This article is a good start as you establish your base in this industry. All the best.