One of the worst mistakes that a trader can make is picking currency pairs and start trading them immediately, without realizing the importance and essence of each pairs.
Novice traders are eager to start making profits in the forex market. Even if they have the perfect entry points or strategic methods and Online Trading Professional Brokers to guide them, they are useless if you pick the wrong pairs. To get a better understanding of forex trading, you have to determine the best currency pairs to trade in the forex market. For this purpose HQBroker Online Broker Review can be of great help.
The important factor you have to consider in picking currency pairs is the correlation. This means you need to be extra careful when making your trade decisions, to avoid doubling your risk or trade against a position you currently have open.
For example, if you buy EUR/USD and GBP/USD, you are doubling your risk. It’s useless in trading both at the same time with USD. You might as well trade one or the other.
The EUR/USD is the most traded pair in the world. It has the highest trading volume and has the lowest spread, making this pair the most liquid in forex. It accounts one-third of the total volume of transactions.
Usually, this pair has lower amount of volatility, making it suitable for beginners. While the forex market is very unlikely to affect or influence the currency pair, it makes it easier to develop analysis and strategies.
It’s the 2nd most traded pair in the forex market, and has the highest liquidity. If you want to learn fast about volatility, then the USD/JPY is for you. However, it’s not a good idea to pump your money into USD/JPY until you get used to its swings and behavior.
This currency pair is most often impacted by political issues, and global factors like the import of oil.
This currency pair is fairly predictable. Forex traders use a support and resistance level trading. Its liquidity and support by stable economies, has made it as one of the best currency pairs for beginners.