Which
currency can we trade?
We will now introduce the currency pairs most popular among forex
traders. Much like exchanging money overseas, in forex every
transaction involves the purchase of one currency and the
simultaneous sale of another. To get easy forex markets refer to
trading currencies in pairs with names combine. Any currency pair
with the USD (US Dollars) will be called major pairs. The 7 most
frequently traded major (currency) pairs make up 75 to 80% of daily
forex trading volume. The 7 majors pairs are as follows;
EUR
/ USD EURO Versus US dollars
GBP
/ USD Great Britain Pound
Versus US dollars
USD
/ JPY US dollars Versus
Japanese Yen
USD
/ CHF US dollars Versus Swiss
Franc
USD
/ CAD US dollars Versus
Canadian dollars
AUD
/ USD Australian dollars
Versus US dollars
NZD
/ USD New Zealand dollars
Versus US dollars
There
are lots of other currency pairs that don't include US dollar would
include the other currencies traded against each other like AUD / JPY
, EUR / GBP which are known as cross reference pairs. So a EUR cross
reference pairs will be any currency pair that is traded with the EUR
, less USD which will be known as a major pair instead.
The
most traded cross reference pair is EUR / JPY. Some traders do basket
trading and will be trading this 8 pairs of currencies.
So
how do you choose which currency pairs to trade most traders new to
the forex market tend to focus on one or two currency pairs to start
it off and makes sense to start the most popular 4 currency pairs
namely ,
EUR
/ USD
GBP
/ USD
USD
/ JPY
USD
/ CHF
It's
mainly because there's so much more information available about the
underlying economies.
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