What Are The Types Of Currency Pairs In Forex Markets?

Getting A Strong Grip Over Currency Pairs In Forex

Forex trading or foreign exchange is the exchange of one currency for the other. When you trade a currency pair, you will either make a profit or a loss depending on the value difference.

The reason Forex trading is such a daunting field is because the value of these currency pairs goes up and down constantly.

The erratic nature of currencies makes it hard to predict if they will be effective in a strategy and if profits can be bagged.

On bad days, even the most prominent of currency pairs can lead to losing trades!

Currency Pairs Are Mainly Of 3 Types In Forex -

· Major Pairs · Minor / Cross-Currency Pairs · Exotic Currencies

Major Pairs

The one thing common between all the major pairs, and the defining factor, is the presence of the USD on base or quote side.

All major pairs are made up of the American dollar. Due to its high economic value, many traders pair up currencies with the dollar.

Major pairs are the most traded currencies worldwide. Some examples of major pairs are - EUR/USD, USD/JPY, and GBP/USD.

Minor Pairs

To put simply, crosses between currencies other than USD are minor cross-currency pairs.

Much like how USD has an impact on major pairs, minor pairs are dominated by EUR, GBP and JPY.

Exotic Pairs

Exotic pairs are made up of currencies coming from emerging countries, ones with a good economy, and European countries outside of the Euro trading zone.

Some examples of this are USD/SEK, USD/HKD and EUR/TRY.

Best Pairs To Trade In 2019

USD/EUR USD/GBP USD/JPY

USD/EUR

Two of the most dominant currencies in the markets today, they make the perfect pair due to their high individual values.

What makes this one of the best currency pairs is their slow nature and lack of major volatility.

Additionally, their popular nature means you can find learning information almost anywhere!

USD/GBP

The opposite of USD/EUR, this currency pair is known for being extremely volatile but profitable all the same.

USD/JPY

Smoother in nature with low spreads to accompany with, the USD/JPY pair can be perfect for starters.

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