What is the Best Pair to Trade?
Most of the Forex trading systems available online are based on pairs of currencies such as EURUSD and GBPUSD. The reason for this is that these pairs are widely used by traders all over the world, while the rest of the Forex market is limited to the US and European markets. There are only a handful of other pairs of foreign currencies, and these pairs are typically the most effective in terms of trading.
If you want to trade internationally, there are many different currencies you can choose from, but if you trade in only one region, you'll probably be restricted to one pair. Forex trading pairs don't only cater to local traders, however, so it's always important to learn about pairs that can be traded across different continents.
Because of the way these pairs are traded, the base pair will generally be the one with the lowest yield. Generally speaking, you'll find that the AUDUSD and the USDJPY are the two strongest pairs globally, but that is not always the case.
For example, some countries, such as Germany, trade with both the Euro and the Japanese Yen. While Germany is generally perceived as being an 'exotic' country, this doesn't mean it can't trade internationally. There are a number of other countries which trade with both the AUDUSD and the USDCAD.
In fact, Forex traders often trade international with pairs which are totally different to the ones mentioned above. Some examples of these pairs include the Canadian Dollar (CAD) and the Japanese Yen (JPY), and the British Pound (GBP) and the Swiss Franc (CHF).
However, you will need to make sure that your chosen pair of currency is listed as the base pair. For example, if you are trading with the US Dollar (USD), you will need to have access to USD at the start of your transaction.
It is true that the AUDUSD and the USDCAD are one of the more popular worldwide currency pair, but they aren't the only pairs available. Other globally-accepted pairs are the Euro (EUR), the Japanese Yen (JPY) and the Canadian Dollar (CAD), and the New Zealand Dollar (NZD).
As you might expect, these currency pairs can vary in price. When you are choosing your pair, it is important to consider the price, rather than the underlying currency. For example, the Canadian Dollar is generally cheaper than the Swiss Franc, while the Euro is more expensive than the New Zealand Dollar.
If you're going to be trading internationally, it is important to know how to read a Forex chart. As well as learning the basics of Forex trading, you will also need to be able to read Forex charts. In fact, even seasoned traders need to learn how to read Forex charts before they start trading.
Trading currencies is not always easy, but if you want to get the most out of your time, you need to be able to use charts to identify trends and areas of weakness, as well as areas of strength. All traders know that no two mouths are alike, and so you should be able to see where the USD has performed well or poorly.
Another thing to consider when choosing your currency pair is whether the pair has a stable currency. If your chosen pair is strong, you'll be able to cut your losses quickly, whereas if the currency has a history of volatility, you could easily be caught out by its fall.
There are a lot of factors that go into deciding which pair of currency is the most successful for trading. You'll probably find that you have a preference for one pair, but it is important to have a basic understanding of the global currency markets, and what makes a pair strong or weak for trading purposes.