Currencies Of Different Countries
What Are The Best Forex Currencies To Trade With?
The Currencies of Different Countries must be checked against your own currency on a regular basis for good results.
Any forex trader always talks about forex currency pairs. If you are new to forex trading, you must know what the currency pair here refers to. In fact, your profits are completely dependent on the currency pair you are working with.
A currency pair can therefore be defined as the pair of currencies that you are forex trading with. You can choose any two currencies of your choice. Most of the currencies that are powerful get used for trading. Here, the power refers to the value of the currency with respect to the economic value. The currencies of countries like United States, Switzerland, UK, etc get frequently used for the forex trading.
Some of the most popularly used forex pairs are as follows:
- EUR/USD : Euro and US dollar
- USD/JPY: US dollar and Japanese Yen
- USD/CAD: US dollar and Canadian dollar
- AUD/USD: Australian dollar and US dollar.
- GBP/USD: British pound and US dollar.
- USD/CHF: US dollar and Swiss franc
Few other leading currency pairs, which are somehow, not too popular, include:
- EUR/CHF: Euro and Swiss Franc
- EUR/GBP: Euro and British Pound
- EUR/JPY: Euro and Japanese yen.
As can be understood, you may not necessarily have the USD in your forex trading pair. Many traders also trade with NZD (New Zealand dollar) and USD. This pair is also pretty easy to trade with and is very predictable. As a beginner, it is always sensible to start with the major currencies.
Although you can trade without the US dollar, it is undoubtedly the most significant and most popularly used currency in forex trading. A study conducted in the year 2007 revealed that around 84% of the forex traders were using the US dollar in their forex trading. Next most popular currency used is the Euro figuring to 37% of trading. The accumulative figure of the mentioned percentages is obviously more than 100%. The reason is that two currencies get used when forex trading. The Japanese Yen, British pound, Swiss franc, Australian Dollar and Canadian Dollar are behind US Dollar and the Euro in the mentioned order.
As a beginner, you must choose the best currency pair to ensure profits. Very low profits or a loss can demoralize you very easily. The Euro/USD pair is undoubtedly the one to start with. The Euro/USD pair has high liquidity outcome in a very small spread and hence this ensures that your costs be low. Another notable point is that you would get ample of information and tips about this forex pair, as this is a very commonly used pair.
As a beginner, you must refrain from using currency pairs that demand in-depth knowledge. For instance, EUR/JPY can fluctuate very rigorously and get you worried too frequently. In such cases, it takes expertise to take the right decisions.
Once you have gained a fair bit of experience with Euro/USD pair, the next pair that you could look to explore is the GBP/USD pair. You must never play around with too many pairs too frequently. Changing pairs frequently will lead to loses and you would find it difficult to settle down in the trade.
Find out here the Best Currencies to deal with!