The foreign exchange market spans around the globe. That means there are trading opportunities available at any hour of the day. Those opportunities come in the form of currency pairs.
While there are many different currency pairing options on the Forex market, not all of them are equal. Certain major Forex pairs consistently present better trading opportunities than others.
If you want to put yourself in the best position to succeed in this global market, here are the five best Forex pairs to trade:
This generally ranks as the most traded currency pair in the world. It tends to follow basic technical analysis patterns quite closely. Another advantage is the low spreads offered by brokers for this pair.
All of those factors make this pair an excellent option for new, intermediate and advanced traders. Each group can take a slightly different approach to get the most out of their EUR/USD trades.
This pair has a lot of similarities to USD/EUR, which is why it’s second on the list. Anyone interested in trading this pair should set up news alerts to keep up with changes in political sentiment between the two countries.
The main factor that puts this pair in third position is the possibility of significant jumps. Seeing profitable pips on a chart makes GBP/USD a pair that’s watched by many traders.
Just be aware that the potential upside of trading this pair also comes with more risk. Since it’s generally viewed as a volatile pair, a smart trading strategy will include a balance with some of the other less risky pairs.
CHF is the Swiss franc. The franc tends to be a little less liquid than the pound or euro. However, it still presents plenty of consistent trading opportunities when paired with the US dollar.
In times of crisis, both of these currencies are typically viewed as safe stores of value. And when volatility is lower, the franc tends to correlate quite closely with the euro.
This Forex trading pair has a large amount of trading liquidity. It tends to have a negative correlation with many other pairs that have USD as the quote currency.
USD/CAD is commonly referred to as a commodity pair. When oil prices go up, CAD normally increases as well. Interest rate decisions by central banks and OPEC meetings are other events that often create USD/CAD trading opportunities.
How to Make the Most of Trading Currency Pairs
Being aware of the most traded currency pairs will put you ahead of plenty of other people interested in Forex. But in order to gain an even greater edge, you need to be aware of specific trading opportunities.
Forex signals are what can help you maximize your trades involving currency pairs. Because the quality of a provider can make or break the usefulness of signals, we highly recommend taking a look at our vetted list of free Forex signal providers.