Forex Trading Pairs - Top 10 Forex Pairs To Trade
Top 10 Best Forex Pairs To Trade
What Are The Top Currency Pairs?
Currency pairs can offer many opportunities for forex traders. Learn more about top forex pairs, including the names of some of the most traded currency pairs.
What are the top forex pairs to trade? Though forex trading is attracting more and more people from all over the globe, not many beginners in the world of forex know what the most profitable and tradable currency pairs are.
Hence, to help you choose the best foreign currencies to invest in, we present the top 10 forex pairs to trade. In fact, learning about forex pairs is the most important step to help you master the art of forex trading.
On top of that, we at Trading Education provide a free online forex trading course that will guide you step by step on your learning journey and help you establish a profitable forex trading strategy for success.
What are Currency Pairs in Forex Trading?
Forex, defined as a global market for currency trading, is the largest and most liquid financial market in the world. To be more precise, forex trading can be described as the process of buying one currency and selling another at the same time. Thus, currencies are always traded in pairs.
We should note that in forex, there is a base currency and a quote currency. The base one is the one quoted first in a forex pair, while the quote one is the one that comes second. If you decide to trade USD/EUR, for example, the US dollar will be your base currency and the euro will be your quote one.
There is also a bid price and an ask price – the rate you can sell a pair at and the rate at which you can purchase a pair, respectively. The difference between the two is the so-called market spread.
Do not forget that the price displayed for a forex pair shows you how much of the quote currency you’ll need in order to buy the base currency. If the price for GBP/USD is 1.31, for instance, that means that one pound is worth 1.31 dollars.
Types of Forex Pairs to Trade
Given the fact that forex is a global market, it’s no surprise that there is a wide range of forex pairs to trade. There are three main types of currency pairs: majors, minors or crosses, and exotic pairs. Major pairs always include the US dollar, and they are the most popular and liquid in the world. Examples include USD/EUR, USD/CHF, and so on and on.
Forex pairs that do not include the USD are not major pairs. When it comes to minor pairs to trade, we talk about pairs that don’t include the US dollar but at least one of the world’s leading currencies (e.g., the Japanese yen, the euro, the British pound). Examples include NZD/JPY, EUR/CAD, GBP/AUD, and so on and on.
Exotic pairs, on the other hand, include a currency from an emerging economy (e.g., Hungary). Though they are the least traded forex pairs, exotic pairs are worth considering. They may include currencies, such as the Emirati dirham (AED), the Malaysian ringgit (MYR), the Thai baht (THB), the Polish zloty (PLN), and others.
Top 10 Forex Pairs to Trade
While there are different foreign currencies that forex traders can sell and buy, here are the top 10 forex pairs to trade:
1. EUR/USD (Euro/US Dollar)
We all know that the euro and the US dollar are two of the leading currencies across the globe. Thus, it’s no surprise that this pair is one of the most popular and liquid forex pair to trade in. Note that as the market is going forward, experts expect that the euro will strengthen.
2. USD/JPY (US Dollar/Japanese Yen)
This is the second most traded forex pair in the currency market, often associated with low spreads. Just like the almighty dollar, the Japanese yen can be seen as a safe haven in times of uncertainty.
3. GBP/USD (British Pound/US Dollar)
The British pound and the US dollar are among the most popular forex currencies to trade. Moreover, GBP/USD often allows profitable pips. Interestingly, this pair is known as the Cable as it’s been initially traded via lines across the Atlantic Ocean. Note that due to the uncertainty around Brexit, this pair may experience high volatility.
4. USD/CAD (US Dollar/Canadian Dollar)
Because of the strong commodities trading between Canada and the USA, there’s no doubt that this is one of the top 10 forex pairs to trade. Note that Canada is a leading exporter of oil and grains. Interestingly enough, the USD/CAD pair is known as Loonie.
5. AUD/USD (Australian Dollar/US Dollar)
The AUD/USD pair is also one of the top 10 forex pairs to trade. Let’s not forget that Australia’s gold industry is massive, with the Australian dollar being dependent on the country’s gold trading practices.
6. USD/CHF (US Dollar/Swiss Franc)
This is another popular and profitable forex pair to trade. Interestingly enough, in forex, the Swiss franc is also considered a safe haven - just like the US dollar.
7. NZD/USD (New Zealand Dollar/US Dollar)
It’s not a secret that New Zealand has a strong agricultural influence across the whole globe. As a result, the pairing between the New Zealand dollar and the US dollar is highly popular in forex trading.
8. EUR/GBP (Euro/British Pound Sterling)
This forex pair is highly popular, perhaps one of the most traded ones across the world. After all, the euro is used in many places across Europe. That being said, the uncertainties around Brexit may impose different obstacles on the British pound.
9. USD/HKD (US Dollar/Hong Kong Dollar)
This pair is also highly popular to trade. In fact, data shows that the Hong Kong dollar is the 13th most traded currency in the world, while USD/HKD is the 11th most traded currency pair.
10. USD/KRW (US Dollar/South Korean Won)
This is another popular forex pair on our list. Interestingly enough, data shows that in 2019, the USD/KRW pair made up 1.9% of all forex trades. Because of the impressive economic growth of South Korea in the past decades, now South Korea’s economy is the fourth largest in Asia, among China, Japan, Hong Kong, India, and Saudi Arabia. No surprise it’s expected that more and more traders will show interest in this forex pair in the future.
How to Trade Currency Pairs in Forex?
As we can see there are different currencies and forex pairs to trade. Having an understanding of the top 10 forex pairs to trade is crucial to help you make profitable moves. For example, USD/EUR allows you to trade without making unnecessary risks - simply because this pair is not too volatile. In fact, to trade USD/EUR successfully, all you need is basic technical analysis. Besides, this pair often has the lowest spread among many brokers.
At the same time, there are 251 recognized countries and territories, so traders should not limit their choices to popular pairs. Proper technical and fundamental analysis, as well as market news and economic announcements, can help traders master the art of forex trading.
Whether you choose to trade majors or exotic pairs, do not forget that in order to succeed in forex you have to invest in proper forex education. The good news is that there are numerous online courses, books, and seminars that can help beginners establish a profitable trading strategy and succeed in forex. Having a reliable platform and a likeminded network is also crucial.
Last but not least, any trader should create a successful trading routine. No matter if you decide to trade currency pairs part- or full-time, you should find a balance between work and lifestyle to create a mindset that can lead you to financial success.
- In forex, considered the largest financial market in the world, currencies are always traded in pairs.
- When it comes to forex pairs to trade, we should mention there is a base currency as well as a quote currency. The base one is the currency quoted first, while the quote currency is the one that comes second.
- There are three main types of currency pairs to trade: majors, minors, and exotic pairs.
- The US dollar is one of the most traded currencies around the globe.
- The top 10 currency pairs to trade in forex include EUR/USD, USD/JPY, GBP/USD, USD/CAD, AUD/USD, USD/CHF, NZD/USD, EUR/GBP, USD/HKD, and XAU/USD.
- Traders should explore different trading options and consider different combinations, including exotic pairs.
- In the end, investing your time in forex education to understand what the best forex currency pairs are is crucial to help you succeed in forex.
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Rememer: CFDs are complex instruments and come with a high risk of losing money due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.