Best Times to Trade the Forex Markets: A Guide


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The US dollar is the base currency, and the Canadian dollar is the quote currency. This gives you 10 different currency pairs to follow, more than enough to trade with. Next, you’ll need to educate yourself on major Forex strategies and decide which strategy would best fit your budget, risk comfortability, and currency trading style. The US dollar and the Japanese yen are two other popular currencies to trade. This currency pair is preferred because of its high liquidity and high volatility as well. There is also a direct correlation between US interest rates and the weakening of the value of the Japanese yen.

  • Unlike the ‘majors,’ however, it is less popular and records relatively low liquidity.
  • Yes, good point nial, i myself only trade with the mayors they are clearly more liquid and they are a better deal on the spread..
  • A currency pair is represented by a three-letter code consisting of two letters indicating the region and one indicating the currency.

Work only with well-known forex providers to lessen the chance that you lose money in a hack or breach. The pound and the US dollar are reactive to global economic news. Always check fundamentals for both countries before trading GBP/USD. EUR/USD is reactive to economic news, especially the monthly non-farm payroll announcement on the first Friday of each month. Compare this chart with the AUD/USD chart above so you can ascertain what makes a high probability trade setup in Forex and when you shouldn’t trade a currency pair.

What Is Forex Trading: Market Movers

The Aussie also tends to do well when China does well because the two countries are big trading partners. The Reserve Bank of Australia also has major influence over the AUD/USD. The susceptibility of the GBPUSD to news and reports from the Federal Reserve and the Bank of England also fuels its volatility. Some negative political factors tend to affect the value of the Yen as well. But the Japanese economy is very robust, causing the currency to always bounce back. is an equally popular and highly reputable forex brokerage.

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If 50 out of 100 of your trades are correct, then you’d expect to at least break even. How to Trade with the Relative Strength Index The Relative Strength Index is a popular technical indicator used to identify over-bought or over-sold conditions. When a currency’s value changes, it changes relative to another currency. Despite the volatility, the USDJPY is stable and less prone to slippage.

The Best Currency Pairs to Trade in 2021

When the price of the USDCAD pair rises, this means that the value of the US dollar relative to the Canadian dollar is strengthening. USD/CAD ranks 4th among the top 10 best currency pairs to trade, its daily trading volume is 5%. To see a full list of currency pairs that we offer, along with their minimum spreads and margin rates, visit our page on forex trading​​. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. Fuller is a professional trader, author & coach who is considered ‘The Authority’ on Price Action Trading. He has taught over 25,000 students via his Price Action Trading Course since 2008. Brenna is a finance editor who enjoys writing about entrepreneurial opportunities and personal finance tips. She graduated from Liberty University with a bachelor’s degree in business and now helps small businesses market their products as a digital marketing consultant.

For example, when the European Central Bank intervenes in market activities to strengthen the euro, you can expect the cross of the dollar to the euro to decline. The price at which the market is willing to sell you a currency. The price at which the market will purchase your currency from you.

It is also essential to remember that foreign currency traders compete with experienced and professional traders. The Securities and Exchange Commission cautions new traders about potential fraud and misleading information. Investors, including commercial banks, prefer to invest their money in countries with promising economic prospects. This means that positive news about a region’s economy will attract investments and surge demand for that area’s currency.

What Is Forex Trading: Forex Trading for Average Consumers

“The Swissie” is a combination of the US limitations of gdp economic activity that isn 039 and the Swiss franc. For many years, the financial stability of Switzerland has been used as a ‘safe haven’ for investors of the forex market, who will rely on trading the CHF in times of market volatility. Therefore, this is a popular forex pair for traders when the economic or political situation of a region is uncertain. As the value of the CHF strengthens against the USD due to increasing investment, the price of this currency pair starts to drop. Although it is one of the most stable currency pairs to trade and therefore offers many benefits. However, when the markets are in a more stable position, the USD/CHF may be of less interest to traders who opt for other major currency pairs that are featured on this list.

forex pairs

I am a relatively new trader and your articles have helped me a lot. 9) Hit F10 and a pop-up price menu of your currently opened watch list will appear. Gold and silver are actual commodities, so they can also be considered “commodity currencies”, and once again they are traded in U.S. dollars, as we noted above. A commodity currency is a name given to currencies of countries which depend heavily on the export of certain raw materials for income.

Technical and Fundamental Analysis of Currency Pairs

But, it is great to add it here because it’s a fabulous example of when NOT to trade. Either of these setups is a high probability, especially on the daily chart. When either of the above scenarios occurs, move down to the 1-hour or 4-hour chart for a precision entry.

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Some popular Forex pairs might be riskier, and some exotic currency pairs might be more worth your time, depending on the factors listed below. Different currency pairs will experience a different speed of change in their exchange rate – more commonly known as volatility. This will impact your decision on what to trade, as it can increase risk. There is a relation between currency pairs, we can say that historically some currency pairs move in one direction and some in the opposite. For instance, some countries’ economies depend on the same factors or are tied closely.

One of the most popular and best pairs to trade in forex has to be the EUR/USD pair. It is also the most traded currency pair and has been listed with virtually all the largest and most popular forex brokerages. By pitting EUR against USD, this currency pair indicates how many US Dollars are needed to buy one Euro.

  • The Canadian dollar is a highly correlated currency of the forex market.
  • Markets in these pairs often have low levels of liquidity and the inherent risk of emerging-market trading.
  • But, it is great to add it here because it’s a fabulous example of when NOT to trade.
  • Yen is considered to be held under a “dirty float” regime thanks to the Japanese government’s policy of active stability intervention.

While the margin is not a direct cost, it significantly impacts the affordability of your trade. Additionally, you must pay a spread, which refers to the difference between an asset’s ‘buy’ and ‘sell’ price. If the U.S. dollar’s value increases compared to the euro, it becomes more economical to travel abroad and purchase imported goods. Conversely, as the dollar weakens, the cost of traveling abroad and importing goods increases.


China’s economy is strong, which makes its currency a stable one. Moderate volatility of the pair allows traders to profit from daily fluctuations without the risk of too abrupt price changes. And the answer is as simple as can be, the safest currency pairs are the most stable ones.

Each market has its own unique language, so it’s crucial to understand the words and phrases commonly used by the best Forex desktop trading platforms. The second most widely used currency in Forex trading is the euro, which is accepted in 19 countries of the European Union and has a code of EUR. Every currency is assigned a three-letter code, similar to a stock’s ticker symbol. Although there are over 170 currencies in existence, the U.S. dollar is the most dominant in Forex trading, making it essential to know its code, which is USD. The EUR/JPY pair indicates how much Japanese yen is required to purchase 1 Euro.

Nearly all charts have personalized setting options to allow you to view a variety of technical indicators like price and volume in order to analyze price movements. The 2nd major influence on the price of GBP was Brexit, the name given to the 2016 vote that would separate Britain from the European Union. The GBP is the 3rd most-traded currency, trailing behind the USD and the EUR. Two major events that have significantly influenced the price of the GBP in the last decade.

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The Forex markets are open 24 hours a day during the week, except on holidays. Instead, there is a global network of brokers and exchanges and brokers around the world. The Forex trading hours are based on the market opening hours of each participating country.

British Pound Sterling is the currency pair of the United Kingdom and it is used all through England, Scotland, and Wales. Overall GBP is the third most traded currency of the forex market. It will give high profits to the traders and help them in a better trade. USD to JPY is the second most traded currency pair in the world. Trading forex with a reputable broker is of the utmost importance when it comes to the forex market. Check out this list of top broker options to trade forex currency pairs.

The next most actively traded pair has traditionally been theUSD/JPY. This pair has been sensitive to political sentiment between the United States and the Far East. The pair tends to be positively correlated to the USD/CHF andUSD/CADcurrency pairs due to theU.S. To reduce such risks, you have to learn when the markets are most likely to be volatile, and therefore decide what times are best for their individualtrading strategyandstyle. CHF is the official currency of Switzerland and it has the highest ranks for being more traded in the forex market.

Trading Support and Resistance – USD/CHF, EUR/JPY –

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A currency pair is a quotation for two different currencies. It is the amount you would pay in one currency for a unit of another currency. For instance, when a trader is quoted EUR/USD 1.13 it means that the trader can exchange 1 Euro and receive 1.13 US Dollars.

In all currency pairs, the daily trading volume of the EUR/USD is 28%. Choose which currency pair you would like to trade, either from our most traded currency pairs list or a more exotic pair. Currency pairs​​ measure the value of one currency against another. They are split into a base currency and a secondary quote currency. Moving down the list of most popular pairs to trade, the next coupling on the list is the USD to Swiss franc . This currency pair is commonly referred to as the “swissie.” The pair tends to negatively correlate with the EUR/USD and GBP/USD pairs.

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