BEST FOR CURRENCY TRADING FOREX

BEST FOR CURRENCY TRADING FOREX

Currencies the best?

Common question I get from fellow traders was: "currency pair to trade what is the best?"

I will answer that question, but I will not hurt a bit starting with the knowledge of the currency pair. There are many pairs (pair) currencies traded in forex. Usually they have "behavior" that is different. There is an interplay, some are not.

Type of Currency Pair:

There are three categories of currency pairs; over, cross, and exotic. The following points will explain currency pairs into three categories and the advantages or disadvantages of each.

• Major Currencies

Couple this currency note, Bro! Couple this currency is the currency of countries that are paired with the U.S. dollar:

EUR / USD - Euro vs. U.S. dollar (Fiber)
GBP / USD - British pound vs. U.S. dollar (Sterling, Cable)
AUD / USD - Australian dollar vs. U.S. dollar (Aussie)
NZD / USD - New Zealand dollar vs. U.S. dollar (kiwi)
USD / JPY - U.S. dollar vs. the Japanese yen (Yen)
USD / CHF - U.S. Dollar vs. the Swiss franc (Swissie)
USD / CAD - U.S. Dollar vs. the Canadian dollar (loonie)

Now, there are some things we need to consider in discussing about this currency pair before we move on to discuss the other pair.

First, many of the major currency pairs are correlated in price movements, meaning they move almost identical to each other. For example, EURUSD and GBPUSD tend to move into the same general direction (not exactly the same), GPBUSD usually slightly more stable than the EURUSD, but if the EURUSD and GBPUSD is in the same trend, then we say they are positively correlated.

Then the pair EURUSD USDCHF negatively correlated to, so if EURUSD moves higher, most likely USDCHF moves lower. You'll find it if you take a chart of the EURUSD and USDCHF chart the same time frame. Under certain conditions, they will look almost identical, but in general they are negatively correlated.

So, how do we mensikapi this correlation for you? This means you must be careful when making trading decisions so as not to double the risk of trading against the current position you have open. For example, if you have a "buy" in EURUSD and GBPUSD, yes you do then "buy" in USDCHF too.

I have observed that the USDCHF is very "choppy" compared with the EURUSD and GBPUSD, and USDCHF I rarely trade, I want to focus on the EURUSD and GBPUSD, if I want to trade in European currencies against the U.S. dollar. This does not mean you should not USDCHF trade, but to know that in my experience, the EURUSD and GBPUSD provide better pricing opportunities.

EURUSD pair which is also the most widely traded, and therefore carry the highest volume of all currency pairs. This also means is the most liquid EURUSD.

Currencies • Commodities

Commodity currencies is the name given to the currency of the country heavily dependent on exports of certain raw materials as income. Major currencies are also considered "commodity money" is the Australian dollar, Canadian dollar, and New Zealand dollars.

Gold and silver are the actual commodity, so that they can also be considered "commodity money", and once again they are traded in U.S. dollars, as we mentioned above.

I got information from friends (who have had experience in trading commodity currency) he said, "that gold, AUDUSD, NZDUSD, and silver, are the best to trade, I tend to avoid the USDCAD, I feel often gets the trading signal" false ", This is attributable to the effects price of crude oil. " Thus the reason ... He continues, "Whatever the reason, I usually avoid trading USCAD and close friends advised me to do the same."

• Crossrate

"Currency pair side" they are the currency that is not paired with the U.S. dollar such as:

AUD / USD - Australian Dollar vs Canadian dollar
AUD / USD - Australian dollar vs Swiss franc
AUD / USD - Australian dollar vs. the Japanese yen
AUD / NZD - The Aussie dollar versus the New Zealand dollar
CAD / JPY - Canadian dollar vs. the Japanese yen
CHF / JPY - Dollar Swiss Franc vs. Japanese yen
EUR / AUD - Euro vs Australian dollar
EUR / CAD - Euro vs Canadian dollar
EUR / CHF - Euro vs Swiss franc
EUR / GBP - Euro British pound vs.
EUR / JPY - Euro vs. Japanese yen
EUR / USD - Euro vs New Zealand dollars
GBP / USD - British pound versus the Australian dollar
GBP / USD - British pound versus the Swiss franc
GBP / JPY - British pound vs. Japanese yen
NZD / JPY - Dollar vs. the Japanese yen New Zealand

Now, I do not recommend you to trade all these crossrate, and if you want, of course there are some that I recommend such as: EUR / JPY, EUR / JPY, GBP / JPY, and NZD / JPY.

The four couples cross the most widely followed by traders and important you create a "watch list" short against the currency pair that you can follow in your forex trading journey.

This is only for knowledge alone, for my advice to newbies still use one currency pair only.

• Exotics

The couple "exotic" is a pair consisting of developed and developing countries. Here is a list of some "exotic" is more frequently traded:

USD / TRY - Turkish lira U.S. dollar vs
EUR / USD - Euro vs. Turkish lira
EUR / USD - U.S. Dollar vs. South African Rand
USD / MXN - Mexican peso vs U.S. dollar
USD / CAD - U.S. Dollar vs Singapore dollar

Exotic currency pairs is not the best place to start as forex traders, especially beginners. Given the "spread" too wide. This means there is more risk built into the exotic, this makes them more susceptible to "slip"

Note for the newbie, "spread" is the price you pay to your broker) it is the difference between bid and ask price, you automatically pay this every time you enter a trade, then it could be very low, sometimes only 1 pip, a pair exotics can have a very high spreads are usually more than 10 pips. Basically, the spread means that you will earn a negative profit figure in early trade, does not make sense if you choose a pair of exotic spread is 15 pips or 20 labeled with exotic trade, while the other pair-pair and only 1 or 3 pips negative. Enter the odds in your favor profit.

Choose currency pairs forex wisely ...!

Hopefully this brief explanation can be your consideration in choosing a currency pair is best for your trading.