When we talk about forex pairs, we need to think about national currencies from different countries being traded against each other. For example, the British pound (GBP) traded against the US Dollar create the (GBP/USD) trading pair.
We also know that traders in the forex market search for the best trading pairs to profit from volatility. Hence, they search for those forex pairs that move the most. But which are these currencies that investors could trade? In this guide, we share with you some of the most volatile trading pairs and other details on how to better trade in the forex market.
Disclaimer: the information shared by AltSignals and its writers should not be considered financial advice. This is for educational purposes only. We are not responsible for any investment decision you make after reading this post. Never invest more than what you are able to lose. Always contact your professional. financial advisor.
What Forex Pairs Move the Most?
We now need to focus on what trading pairs move the most. Usually, the trading pairs that move the most are smaller currencies. Why? Because these currencies are usually managed with a non-conventional monetary policy. Small currencies or currencies from developing countries would move the most, but they are not the best trading pairs for investors that want to trade in the market.
But how to know which is the fluctuation of a trading pair? Let’s use an example. If we trade the GBP/USD pair, we could see that it fluctuated between 2 and 1.25 over the last years. This shows that there was a fluctuation of around 60%. If you were a good trader and captured tops and bottoms, you could have made 60% profits.
However, if you trade other trading pairs that move even further, your profits could be larger. When you trade smaller pairs, you should always focus on the major currency. You don’t want to hold and use a currency that might regularly lose value.
What is the Best Forex Pair to Trade?
The best forex pair to trade would depend on your trading strategies and preferences. There is no “best trading pair” to trade. The most commonly traded pairs in terms of their volume include EUR/USD, GBP/USD, USD/JPY, AUD/USD, EUR/GBO, USD/CAD, USD/CHF and NZD/CHF, among others.
These are just some of the largest currencies in the world. They are also currencies from developed economies that have usually very clear monetary policies compared to developing countries. Additionally, every single major broker would offer you these trading pairs.
If you are a larger trader, you care about volume and liquidity. These trading pairs are also some of the largest when it comes to trading volume and liquidity. Traders should use these major currencies to trade in the forex market and try increasing their portfolios.
You can also trade with signals to improve your chances of registering gains.
How Many Forex Pairs do you Trade?
Usually, investors focus on few currency pairs to trade. This would let them create their trading strategies, know the market and understand the price movements that there are between these currencies. Trading two different trading pairs would also let you know the fundamentals behind each of these pairs that would let you trade in the forex market.
The better you know the trading pair, the easier it will be for you to make profits trading these currencies. There are many things to take into consideration about the trading pairs you use. Some of them could be very profitable if you closely follow the events that could change the way in which they behave.
However, if you are a more advanced trader, you can follow more trading pairs. But it is always recommended to start with one or two currencies rather than with more. The most traded pairs around the world include the EUR/USD and the USD/JPY, but you can focus on any of the currencies shared before.
What is the Best Time to Trade Forex?
It depends on your currencies and the trading strategies you follow. In general, the moment with the largest volume (specifically for the GBP/USD trading pair) is between 11 a.m. to 18 p.m. (UK time) This is because the European and American markets trade together during these hours.
But if you focus on Asian currencies then you should try to trade in the early morning. This would be the moment with the highest volumes for currencies such as JPY, AUD or NZD.
