Forex trading pair

But which are some of the most popular forex pairs amongst traders, and why? Trades are executed at the rate you see, on easyMarkets platforms ensuring you will never be surprised by a spread change during volatility. As part of our Price Transparency Promise, our spreads never change during trading hours, so you know your costs upfront. Protect yourself and your open trades against runaway losses. Another condition offered as a standard feature on easyMarkets accounts, this ensures you are protected when you trade. A forex pair quotes the price of one currency against another.

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WATCH RELATED VIDEO: What are the best currency pairs for forex day trading?

Majors, Minors & Exotic Currency Pairs

There are many official currencies that are used all over the world, but there are only a handful of currencies that are traded actively in the forex market.

For example, due to the size and strength of the United States economy, the American dollar is the world's most actively traded currency. Currency pairs are the national currencies from two countries coupled for trading on the foreign exchange FX marketplace. Both currencies will have exchange rates on which the trade will have its position basis. All trading within the forex market, whether selling, buying, or trading, will take place through currency pairs. In general, the eight most traded currencies in no specific order are the U.

Nearly any nation's currency may trade, but some currencies pair more frequently than other money. All of the primary currency pairs contain the USD. There are many major currency pairs within the forex market around the world. As an example, some of the most common currency pairs outside of the Eurodollar are:. There are also currency pairs that do not trade against the US dollar, which have the name cross-currency pairs.

Common cross currency pairs involve the euro and the Japanese yen. Currencies must be traded in pairs. Mathematically, there are 28 different currency pairs that can be derived from just eight currencies alone. However, there are about 18 currency pairs that are conventionally quoted by forex market makers as a result of their overall liquidity.

These pairs are:. The total amount of currency trading involving these 18 pairs represents the majority of the trading volume in the FX market. This manageable number of choices makes trading a lot less complicated compared to dealing with equities, which has thousands of possible choices to choose from.

Bank for International Settlements. Accessed Aug. Your Money. Personal Finance. Your Practice. Popular Courses. Table of Contents Expand. Table of Contents. What Are Currency Pairs? Key Takeaways Forex markets are used to trade exchange rates between two or more national currencies.

The most common currency pairs often involve the US dollar or Euro, but may also show up among geographic neighbors like Australia and New Zealand. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear.

Investopedia does not include all offers available in the marketplace. Related Articles. Partner Links. Related Terms Reciprocal Currency A reciprocal currency in the foreign exchange market is a currency pair that involves the U. Currency Pairs Definition Currency pairs are two currencies with exchange rates coupled for trading in the foreign exchange FX market.

Foreign Exchange Forex The foreign exchange Forex is the conversion of one currency into another currency. Forex Broker Definition A forex broker is a financial services firm that offers its clients the ability to trade foreign currencies. Forex is short for foreign exchange. What Is Cable in Forex Trading? Cable is a term used among forex traders that refers to the exchange rate between the U. Investopedia is part of the Dotdash publishing family.

Pair Trading: Effective Strategies

Yesterday I published some important changes to the QSForex software. These changes have increased the usefulness of the system significantly to the point where it is nearly ready for multi-day tick-data backtesting over a range of currency pairs. As I mentioned in the previous entry , for those of you who are unfamiliar with QSForex and are coming to this forex diary series for the first time, I strongly suggest having a read of the following diary entries to get up to speed with the software:. A feature that I have continually been discussing in these diary entries is the capability to support multiple currency pairs. At this stage I've now modified the software to allow differing account denominations, since previously GBP was the hardcoded currency. It is also now possible to trade in other currency pairs, except those that consist of a base or quote in Japanese Yen JPY. The latter is due to how tick sizes are caclulated in JPY currencies.

Generally, traders will choose to trade the EUR/USD or USD/JPY because there is so much information and resources available about the underlying economies. Not.


Forex trading is essentially the buying of one currency and the simultaneous selling of another. Therefore when trading currencies we will always see them quoted in pairs. When placing a trade we are speculating on which currency we believe will become stronger or weaker against the other with the goal of making a profit from the exchange rate movement. The currency to the left is called the base currency. The currency to the right is called the quote the currency. The quote currency tells us how much it is worth against 1 unit of the base currency. The base currency is the basis for the buy or the sell trade. When we are buying the base currency, in traders jargon we call this going long looking to profit from the pair rising , and when we are selling the base currency we call this going short looking to profit from the currency pair falling. Major currency pairs all contain the US Dollar on one side — either on the base side or quote side. The majors generally have the lowest spread and are the most liquid.

Currency Trading

forex trading pair

Which pairs you opt to day trade or swing trade will depend on your trading style. In this article, we will talk about different trading styles, and then discuss which forex pairs to trade based on what style you are or want to be. New to forex? I created a comprehensive Forex Intro course that gives you an overview of this market, helping you to determine if it is right for you and how you may wish to trade it.

Some currency pairs are more liquid than others, which in theory makes them easier to trade. Below you will find information on the most popular currency pairs with the highest trading volumes.

What Are the Most Commonly Traded Currency Pairs?

Karim Yousfi is a experienced trader and analyst. He is managing a team of 5. Linkedin Profile. We have a section on this page where we walk about our Funded Trader Program, click here to go there! Currency pairs involve two currencies, whereby one is a quotation of the other.

Major, minor, exotic and crosses: Understanding the different forex pairs

The global economy is dependent on the highs and lows of different country-specific currencies. In the forex market, a currency pair is a quotation of the relative value of one currency in terms of another currency. So, without further ado, here is a list of the seven major currency pairs in no specific order. A strong dollar leads to a decline in the value of the pair and vice versa. Due to a consistent lower interest rate on this pair, traders can profit from the interest rate differential with USD, amidst a stable exchange rate. In the ongoing Brexit negotiations, experts around the world are keeping a close watch on the performance of this pair.

Major currency pairs are the most frequently traded FX instruments. All major pairs consist of the US Dollar being quoted against another.

Most traded currency pairs on the forex market in 2020

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money. This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media.

The Best 10 Forex Currency Pairs

Sure, you can look at trends and important data about individual currencies, as well as currency pairs and how they interact with one another. And you can check out what the experts are doing. Check out the tips below to learn more. Major pairs are those that are paired with the U. Plus, volatility is typically going to be low with these, and you can also usually get low spreads when you go with major currency pairs. Examples include the U.

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Forex trading

The forex pairs can typically be split into four categories — majors, minors, exotics and crosses — and the best trading brokers will let you open and close positions in each of these. You can read a LonghornFX review for one example of many firms that offer such a platform. As you may have gathered from the name, the major forex pairs are those that are the most actively traded. It should be noted that the major label is fluid, and there is no dictionary definition as to what makes for a major currency. What is unique about trading the majors? Other examples of minor currencies include EUR, AUD and CHF, and while these are countries and zones of relative strength and wealth, they are not to be confused as majors when looked at from a forex perspective.

This part of our website is only available in english language. Click on the link to continue or go back to the site. The Foreign Exchange market, referred to as Forex or the FX market, is the largest financial market in the world and forex trading is very popular. The Foreign Exchange market, often referred to as Forex, FX market or spot market for forex, is considered to be the largest and most liquid market in the world.

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