Forex Pairs: Trading The Best Currency
If you are exchanging Swiss francs for US dollars, for example, the currency pair is CHF/USD. The pair is the two currencies involved in your trade. Forex pairs are always involfed in currency trading.
Trading is limited in most cases to the currencies of the larger financial powers, though theoretically you could trade any two currencies of the world. This does not mean necessarily the most powerful politically or the biggest countries. Because of the global importance of the Swiss banks, Switzerland for example a small country, is a major player in the financial markets.
There are 6 major forex pairs which between them account for 90% of the funds traded on the forex markets. These are:
- USD/EUR: the US dollar and the euro
- GBP/USD: the British pound and US dollar, nicknamed Cable because it used to be synchronized on both sides of the Atlantic by a cable running under the ocean.
- USD/JPY: the US dollar and Japanese yen.
the US dollar and Swiss franc: USD/CHF
- USD/AUD: the US dollar and the Australian dollar.
- USD/CAD: the US dollar and Canadian dollar.
In the beginning it is best to stick with the majors. But some traders do get involved in other combinations of these major currencies or pairs that include other currencies such as the New Zealand dollar.
The most significant single currency is the US dollar and according to a 2007 study, is involved in 85% of trades. The euro is second at 37%. Next come the yen, pound, Swiss franc, AUD and CAD in that order. These add up to more than 100% because there are always two currencies in every trade. In case you were wondering.
What Is The Best Currency Pair When You're Just Starting?
If you are just starting out in forex, most experts advise beginning with the EUR/USD pair. This is because there is a lot of information about these currencies and the high liquidity results in a smaller spread, so your costs will be lower.
Unless they have special knowledge, most newbies avoid some of the other currencies because they have particular characteristics which make them unpredictable. For example Canada is an oil exporter so the value of the Canadian dollar is strongly influenced by the price of oil. Because Japan is a large consumer and importer of oil the Japanese yen can also be affected by the price of oil in the opposite direction.
When you are starting out you will not want to get involved in a lot of different currencies. For the first few months at least, probably the best thing to do is to take the EUR/USD market and stay with that. The second choice of the major forex pairs would be the GBP/USD for most new traders. - 23199
Trading is limited in most cases to the currencies of the larger financial powers, though theoretically you could trade any two currencies of the world. This does not mean necessarily the most powerful politically or the biggest countries. Because of the global importance of the Swiss banks, Switzerland for example a small country, is a major player in the financial markets.
There are 6 major forex pairs which between them account for 90% of the funds traded on the forex markets. These are:
- USD/EUR: the US dollar and the euro
- GBP/USD: the British pound and US dollar, nicknamed Cable because it used to be synchronized on both sides of the Atlantic by a cable running under the ocean.
- USD/JPY: the US dollar and Japanese yen.
the US dollar and Swiss franc: USD/CHF
- USD/AUD: the US dollar and the Australian dollar.
- USD/CAD: the US dollar and Canadian dollar.
In the beginning it is best to stick with the majors. But some traders do get involved in other combinations of these major currencies or pairs that include other currencies such as the New Zealand dollar.
The most significant single currency is the US dollar and according to a 2007 study, is involved in 85% of trades. The euro is second at 37%. Next come the yen, pound, Swiss franc, AUD and CAD in that order. These add up to more than 100% because there are always two currencies in every trade. In case you were wondering.
What Is The Best Currency Pair When You're Just Starting?
If you are just starting out in forex, most experts advise beginning with the EUR/USD pair. This is because there is a lot of information about these currencies and the high liquidity results in a smaller spread, so your costs will be lower.
Unless they have special knowledge, most newbies avoid some of the other currencies because they have particular characteristics which make them unpredictable. For example Canada is an oil exporter so the value of the Canadian dollar is strongly influenced by the price of oil. Because Japan is a large consumer and importer of oil the Japanese yen can also be affected by the price of oil in the opposite direction.
When you are starting out you will not want to get involved in a lot of different currencies. For the first few months at least, probably the best thing to do is to take the EUR/USD market and stay with that. The second choice of the major forex pairs would be the GBP/USD for most new traders. - 23199
About the Author:
Author, T. O'Reilly has worked at day trading the currency market for the past two years and is up to $363 per day. Find out how you can do the same from the comfort of home using forex pairs. Click here: http://daytradingthecurrencymarket.com
posted by X - Men @ 4:55 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home