Selecting the best forex pairs to trade can be challenging. As a beginner, you will learn how to read currency pairs — however, the techniques you use will not be the same for every pair.
Here is a guide to help you decide the best currency to trade in forex.
Here is a guide to help you decide the best currency to trade in forex.
The four most traded forex pairs
EUR/USD
EUR/USD is the most traded pair in the world. On some days, one of every four forex trades involves this pair.
USD/JPY
USD/JPY is the second most traded pair because Japan’s economy is considered a benchmark for Asia.
USD/GBP
USD/GBP is usually ranked third due to transatlantic economic ties.
AUD/USD
AUD/USD is the fourth most-traded pair due to Australia’s status as a regional benchmark and trading partner.
How to read forex pairs
Forex pairs are written with a combination of two abbreviations, for instance, (EUR/USD, AUD/USD, or USD/JPY).
The first currency in the pair is known as the “base,” while the second is the “quote.” The forex price is the amount of quote currency it takes to buy 1 unit of the base currency.
For example, AUD/USD 0.67 means you can buy 1 unit of AUD ($1 Australian) with 0.67 of the quote currency ($0.67 US).
The first currency in the pair is known as the “base,” while the second is the “quote.” The forex price is the amount of quote currency it takes to buy 1 unit of the base currency.
For example, AUD/USD 0.67 means you can buy 1 unit of AUD ($1 Australian) with 0.67 of the quote currency ($0.67 US).
Types of forex currency pairs
While there are many currency pairs on the market, traders should be aware that these pairs fall into three broad categories — major pairs, minor pairs and exotic pairs.
What are the major forex pairs? Major pairs are among the most widely traded pairs on the global market, as they are tied to the US dollar. Minor pairs involve currencies outside the USD, while exotic pairs are currencies from smaller countries paired with major currencies.
What are the major forex pairs? Major pairs are among the most widely traded pairs on the global market, as they are tied to the US dollar. Minor pairs involve currencies outside the USD, while exotic pairs are currencies from smaller countries paired with major currencies.
| Major pairs | Minor pairs | Exotic pairs | ||
| EUR/USD | EUR/JPY | USD/TRY | ||
| GBP/USD | EUR/GBP | USD/ZAR | ||
| USD/JPY | AUD/NZD | USD/DKK | ||
| AUD/USD | GBP/AUD | USD/HKD | ||
| NZD/USD | AUD/SGD | |||
| USD/CHF | EUR/TRY | |||
| SGD/JPY |
What forex pairs move the most?
This can be difficult to answer as the market changes every second, making it almost impossible to predict the most profitable pairs. However, some top forex pairs, such as USD/CHF, move within tight ranges, meaning swing trading and break-out strategies will not be effective.
Swing traders and those seeking range breakouts typically think that the best forex pairs to trade experience wide price changes. Still, you should only execute trades you are comfortable with and that align with your investment strategy.
Swing traders and those seeking range breakouts typically think that the best forex pairs to trade experience wide price changes. Still, you should only execute trades you are comfortable with and that align with your investment strategy.
The best currency pairs to trade for beginners
What are the best forex pairs to trade for novices? It depends on your strategy and risk tolerance. Here is a look at your choices.
| Forex pairs | Why? |
EUR/USD and GBP/USD |
Opportunities for scalping and swing trading during the day. However, their high trading volume and other economic factors can spike prices. |
USD/JPY |
Modest profit opportunities and less volatility. Often noted as the best forex pairs to scalp as the pair changes direction at well-defined support and resistance levels. |
AUD/USD and NZD/USD |
Sense of familiarity to traders in Australia, New Zealand and the US. Access to economic news can also make it easy to predict pricing. |
Cross pairs (major currencies aside from the USD, such as EUR/GBP) |
Known for their predictability following economic news and events. |
Yen pairs (e.g. CAD/JPY, CHF/JPY and GBP/JPY) |
Can be predictable based on economic events. For example, energy prices strongly influence CAD/JPY. |
Start trading currency pairs with TMGM
When trading forex, traders must find a regulated broker to help conduct trades securely. TMGM offers clear spreads, leverage and transparent pricing. We also have 10+ liquidity providers, rapid NY4 servers for superior trade execution speeds and 24/7 support.
After you decide on the best forex pairs to trade, you’ll also need a trading platform. MetaTrader 4 is a top platform for new forex traders because it offers a demo account mode, back-testing features to test your strategies on historical market data, and customisable charts and indicators so that you can get all the necessary information on one screen. You can download MetaTrader 4 directly from the TMGM website.
Open a forex trading account with TMGM today. For other trading options, please visit our markets page.
Open a forex trading account with TMGM today. For other trading options, please visit our markets page.
Frequently Asked Questions
It is difficult for individual investors or institutional traders to manipulate the market, as it changes every second. However, central banks and governments can introduce monetary policies that can alter the value of currency pairs. For example, when the US Federal Reserve alters interest rates, it can affect the value of all USD pairs.
No one can predict currency rates with 100% accuracy. However, some pairs react more predictably to economic events. Others have more predictable price action patterns or trade within well-defined ranges. TMGM offers daily analysis and webinars for our clients, helping them make more strategic decisions on their trades.