In this world of innumerable trades emerging rapidly, each forex trader undoubtedly seeks the best currency pairs to trade with for obvious reasons. But, we are standing on a decision that it is greatly advised to look into all favourable options with a detailed knowledge of it. While understanding currency pairs can seem extremely complex, forex traders must review their options with keeping two major aspects of liquidity and stability at fore front.
EUR/USD (Euro-US dollar)
It’s quite evitable that the Euro and the Dollar are the two largest currencies at present in the world. Further adding up, they possess very high liquidity as well as stability. As such EUR/USD seems to emerge as popular currency pair and it is quite suggested as the starting place for a start-up trade. The low bid and its all time available units for extremely huge trades making it way convenient and easy to create analysis and strategies that shall benefit the traders.
USD/JPY (US dollar-Japanese yen)
The two extremely liquid global power’s currency creates a great duo for a profitable trade. Popularly known as the Gopher, it ranks the second most commonly traded pair on the foreign exchange market. USD/JPY is great for providing volatility. It is also a good guide for beginners to swift trading tools. However, it is still advisable to get a practical image of its attributes before involving huge amount of capital in it. This pair sharply contrast each other while JPY tends to fluctuate, while USD comparatively stands stable.
GBP/USD (British pound-US dollar)
GBP/USD possesses one of the largest markets in the world. It appears to be fairly predictable. Moreover, it is also considered as one of the oldest in the world. It is popularly known by the nickname “The Cable” in reference to the older technologies that used to carry the trading rates. It is also considered as one of the best currency pairs for beginners due to its extremely liquid and stable economies.
GBP/USD also deals with an interesting relationship with EUR/USD – more precisely, it tends to mirror it.
AUD/USD (Australian dollar-US dollar)
AUD/USD which is also called the Aussie, has significantly backed the position of being the third most popular currency. With both economies doing terribly well for quite a time now within the country and as such made an appealing appearance in the international market against many other currencies. Though, there are also some significant shortfalls and financial collapses. The pair turns out to be a bit challenging one as compared to the others, but its unique volatility can’t be denied at the same time.
Advantages of major currency pairs
- They are having better stability due to the large amount of volumes being traded
- They are widely available in most of the reputable forex brokers
- There is plenty of information, research and analysis done on them
- They have smaller spreads than rearer currency pairs
Apart from all these points, there is one severe fact that needs to be considered – forex traders cannot tend to seek the best pair unless they have jumped into it and experienced it practically. Guidance is easy to find but experience is what helps forex traders choose the best and favourable currency pairs.