The author is an expert in the field of multi-asset trading.
Top Currency Pairs to Trade in 2018
We know that the spot forex market is the largest, most global and most liquid financial market in the world with average daily trading volumes exceeding $4 trillion, yet the question of which currencies to trade in this huge and enticing market is not so easily answered. Equiti gives you the opportunity to trade over 60 major and minor currency pairs of rolling spot foreign exchange around the clock, but there is no definitive answer as to which of these are the “best” to trade. As with most things in this market, the choice is ultimately up to you.
The answer to the question as to which currency pairs to trade is relative to your trading style and risk-appetite, but nevertheless there are certain dominant currency pairs that are generally accepted to be the top traded ones, and will continue to be so during 2018. These currency pairs statistically have the most trading volume on most days and are part of the largest and most powerful global economies, so there is no surprise that these are the most popular ones among traders from all parts of the world.
The Major Currency Pairs
EUR/USD (Euro – US dollar)
USD/JPY (US dollar – Japanese yen)
GBP/USD (British pound – US dollar)
USD/CHF (US dollar – Swiss franc)
AUD/USD (Australian dollar – US dollar)
USD/CAD (US dollar – Canadian dollar)
NZD/USD (US dollar – New Zealand dollar)
The so called “majors” are not necessarily the best currency pairs to trade, but they are the ones with very high liquidity and numbers of transactions. Perhaps also not surprisingly, the US Dollar is present in all these pairs. The USD is the single most dominant, strongest, and most traded currency in the world. The US economy is the largest in the world, and the US dollar is the preferred reference in many worldwide currency exchange transactions, in addition to being the dominant global reserve currency.
These currency pairs are connected to countries with the most financial power and worldwide trade, and account for the majority of speculative trading in the forex market. That being taken into account, the values of these major currencies constantly fluctuate against each other, and can have high levels of volatility. This means that traders can make, or lose, money on these fluctuations. These pairs also tend to have lower spreads which makes for better trading conditions.
The Most Popular Currencies
US dollar (USD)
Japanese yen (JPY)
British pound (GBP)
Swiss franc (CHF)
Canadian dollar (CAD)
Australian dollar (AUD)
There are over 200 countries in the world and equally as many unique currencies, but as we’ve seen with the major pairs above, certain currencies are clearly the leading ones. These are the most popular and most influential currencies, and most highly traded pairs will involve at least one of them.
As globalisation becomes more and more prominent, these currencies become more and more interconnected, and the dynamics of these phenomenon are very evident in the foreign exchange market. It is important to study the market and the economic situation before committing to making any trades.
You can try out all the many currency pairs and practice using a risk-free demo account with a virtual balance. This will help you in identifying which currency pairs to trade and how to do so effectively.