The best currency pairs to trade in forex. It’s no doubt that you will find currency pair when you learn Forex. It’s because every trade happened in the Forex market will be based on currency pairs. That’s why it will be a familiar term for everyone who is playing in Forex trading. There are various currency pairs available in the market and the question will be: which one is the best to trade?
What Are the Most Excellent Currency Pairs to Trade?
Considering the great number of currency pairs available in the Forex market, you may find yourself confused on choosing the best currency pair to trade on. The answer is actually simple: it depends. Yeah, every trader may have different best choice. To help you determine your choice, here is a brief about currency pair and some considerations to select your best currency pairs.
What Are Currency Pairs?
is mostly about purchasing and selling currencies in couple. The currency pair itself refers to a quotation of the relation value of a currency unit against another unit in the Forex market. The two currencies are usually presented in a determined international code of each currency unit. For example, there is USD for US dollar, EUR for Euro and GBP for Pounds.
• Base Currency
In currency pairs, there will always be two unit of currency with the first currency appearing called as base currency. Base currency is typically recognized as transaction currency as well. The base currency here refers to how much of the following currency is required to get one unit of the transaction currency. For instance in a USD/EUR currency pair, the base currency is USD.
• Quote Currency
Following the base currency, there is quote currency or also called as the counter currency. The quote currency refers to the second currency in Forex currency pairs. In a direct quote, the quote currency will be the foreign currency. On the other hand, in an indirect quote, the counter currency is the local currency. In a USD/EUR currency pair, the quote currency is EUR.
What Are the Best Currency Pairs to Trade?
Then, what are the best currency pairs to trade in the Forex market. Considering that there are more than 200 countries around the world, you will be able to find countless currency pairs to engage with in Forex. However, not all currency pairs are potential to provide the best results for you. So, which one is the best to trade in the market?
Before analyzing your best choice, it is better to remember that there are some popular currencies in the Forex market now. They include EUR (Euro), USD (US Dollar), AUD (Australian Dollar), CHF (Swiss Franc), CAD (Canadian Dollar), GBP (British Pound) and JPY (Japanese Yen). Other than these currencies, there are actually a few popular ones that you can take into account.
Analysis of the Best Currency Pairs in the Market
Among the popular currencies above, the currency pairs which are considered to be the most favorable one is USD/EUR. This currency pair is popular because it has the lowest spread among Forex brokers. What makes this currency pair great is that it is not really volatile. If you don’t want to take so much risk on trading, you can consider selecting this as your best.
In addition to USD/EUR, there is also USD/GBP which is popular for its possible large jumps and profitable pips. When it comes to provide high profit, this currency pair may have bigger risk as well. The last, USD/JPY is also popular since it has low spread and high profitable chances. However, you may need to learn Forex more until you can choose your best.