The foreign exchange market is one of the largest online businesses that anyone can get involved in by depositing a few dollars into an account. People across the world are joining this business ever day as an optional source of earning. Beginners often get confused when they are about to start trading by utilizing currency pairs. Most of them always keep asking which currency pair is the best for trading and considered the best currency pairs in the entire FX market. However, it is tough to mention the best currency pair because multiple factors control the ups and downs of the price movement.
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Traders often avoid considering the best currency pairs carefully
According to the FX survey, most newbies want to earn lots of money within a short period, which is their main thought. This kind of attitude often ruins all the capitals of a trader. Several currency pairs should be known before starting FX business –
Many retailers have observed that some pairs have lesser spreads like the EUR/USD pair. They think that they should choose this kind of spread pair for trading purposes because this pair can make more money. In addition to this, EUR/USD stays active in maximum time. Retailers assume that this pair will help them gather experiences to work with other currency pairs. Everyone at Saxo markets prefers to trade with low risk since they trading is a very risk task. By taking conservative steps, they master the art of trading like the elite UK traders.
This thought is true indeed, but the problem is – the dealers are still far from considering other factors that control the currency pairs. Some professional traders state that they thought the GBP/USD and EUR/USD were the best currency pairs and were profitable, but after trading with them, they noticed that none of these pairs moved well to make profits. Instead of these pairs, USD/JPY moved like a rocket, and it became more accessible for those traders who traded with this pair. Those experienced dealers know the movement of these pairs very well, and they also stick to their strategies to make profits from these pairs. Yet, they couldn’t predict the movement of the EUR/USD or GBP/USD pair.
Top factor to consider while choosing a pair
Experts use the analogy of gambling to explain that it often becomes confusing for the traders to choose a currency pair. Gambling is often regarded as a better way to eliminate confusion about the FX market. In the busiest table of gambling, lots of players invest their money. The Forex market and its currency pairs aren’t that different.
It has been determined that more than 70% of the trading and business is conducted between the EUR, JPY, and USD, while the AUD and British pounds are used for only 10%. Among all of them, the USD is regarded as the most dominant one, and that’s why most traders concentrate on this.
Tips for trading
There are a few currency pairs that can be used for trading in the Forex market. So, while choosing these best currency pairs for trading, you have to be careful.
Before selecting a currency pair, a retailer must look for the pairs and analyze their financial condition. Some of these common pairs are – USD/EUR, GBP/USD, USD/JPY. In the marketplace, the prices of these pairs move sharply too often.
Before choosing the pair, a retailer should know which one can help him to realize the situation. Some of them have adequate knowledge about EUR and USD, so they should work and trade on those pairs.
Fundamental and technical analysis
Both of these analyses are important because being a technical analyst you can understand the graph and the prices’ movement. At the same time, a fundamental analyst must observe and be careful about the recently-released news and events about the markets.
There is no currency pair in the Forex market that is better than another, so you have to be cautious while choosing the currency pairs, so that you can handle the entire situation.