Are you a beginner in the forex market looking for the easiest forex pairs to trade? Look no further. In this article, we will take you through the d
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Are you a beginner in the forex market looking for the easiest forex pairs to trade? Look no further. In this article, we will take you through the different types of forex pairs, factors to consider when choosing a forex pair, and the easiest forex pairs for beginners.
Types of Forex Pairs
Forex pairs are divided into three categories:
Major Pairs
Major forex pairs consist of currencies from the most developed economies in the world. These currencies are the most heavily traded and have high liquidity. The major forex pairs include:
- EUR/USD
- USD/JPY
- GBP/USD
- USD/CHF
- AUD/USD
- USD/CAD
Minor Pairs
Minor forex pairs consist of currencies from developing economies and are less liquid compared to major pairs. The minor forex pairs include:
- EUR/GBP
- EUR/CHF
- NZD/USD
- GBP/JPY
- AUD/JPY
Exotic Pairs
Exotic forex pairs consist of currencies from emerging markets and are the least liquid forex pairs. These pairs have a wider bid-ask spread and high volatility. Exotic pairs include:
- USD/HKD
- USD/TRY
- USD/ZAR
- EUR/TRY
- USD/MXN
Factors to Consider When Choosing a Forex Pair
When choosing a forex pair to trade, it is essential to consider the following factors:
Liquidity
Liquidity refers to the ease of buying and selling a particular currency pair. High liquidity means that the currency pair has many buyers and sellers, making it easy to enter or exit a trade. Major forex pairs have high liquidity compared to minor and exotic pairs.
Volatility
Volatility is the measure of the price movement of a currency pair. High volatility means that the currency pair’s price can fluctuate rapidly, providing opportunities for profits or losses. Exotic pairs are the most volatile, while major pairs are less volatile.
Spread
The spread is the difference between the bid and ask price of a currency pair. A lower spread means lower trading costs, making it easier to profit from a trade. Major pairs have lower spreads compared to minor and exotic pairs.
Easiest Forex Pairs for Beginners
As a beginner in the forex market, it is advisable to start with major pairs due to their high liquidity and lower volatility. The following are the easiest forex pairs for beginners:
EUR/USD
The EUR/USD pair is the most traded forex pair globally, accounting for about 30% of all forex trades. This pair has high liquidity, making it easy to enter or exit a trade. The EUR/USD pair also has a low spread, making it a popular choice for beginners.
USD/JPY
The USD/JPY pair is another popular forex pair, accounting for about 17% of all forex trades. This pair has a relatively low volatility and a narrow bid-ask spread, making it an excellent choice for beginners.
GBP/USD
The GBP/USD pair is also a major forex pair and has high liquidity and low volatility. This pair is ideal for beginners as it is easy to analyze and has a low spread.
USD/CHF
The USD/CHF pair is a popular forex pair for beginners due to its low volatility and narrow bid-ask spread. This pair also has a negative correlation with the EUR/USD pair, making it an excellent choice for diversification.
AUD/USD
The AUD/USD pair is a popular forex pair for beginners due to its high liquidity and relatively low volatility.
Other Forex Pairs for Beginners
In addition to the major forex pairs mentioned above, there are other forex pairs that are suitable for beginners. These include:
EUR/GBP
The EUR/GBP pair is a minor forex pair that is suitable for beginners due to its low volatility and narrow bid-ask spread. This pair is also easy to analyze, making it an excellent choice for beginners.
NZD/USD
The NZD/USD pair is another minor forex pair that is suitable for beginners. This pair has high liquidity and low volatility, making it easy to trade.
USD/CAD
The USD/CAD pair is a major forex pair that is suitable for beginners. This pair has low volatility and a narrow bid-ask spread, making it easy to trade.
Conclusion
Choosing the right forex pair to trade is essential for beginner traders. As a beginner, it is advisable to start with major forex pairs due to their high liquidity and lower volatility. The EUR/USD, USD/JPY, GBP/USD, USD/CHF, and AUD/USD are the easiest forex pairs for beginners. However, there are other forex pairs that are suitable for beginners, such as the EUR/GBP, NZD/USD, and USD/CAD. Remember to consider factors such as liquidity, volatility, and spread when choosing a forex pair.
FAQs
- What are forex pairs?
- Forex pairs are currency pairs that are traded on the forex market.
- What are major forex pairs?
- Major forex pairs consist of currencies from the most developed economies in the world.
- What are minor forex pairs?
- Minor forex pairs consist of currencies from developing economies.
- What are exotic forex pairs?
- Exotic forex pairs consist of currencies from emerging markets.
- What are the easiest forex pairs for beginners?
- The easiest forex pairs for beginners are the major pairs, including EUR/USD, USD/JPY, GBP/USD, USD/CHF, and AUD/USD. However, there are other forex pairs suitable for beginners, such as EUR/GBP, NZD/USD, and USD/CAD.
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