What currencies are available on Forex - exotic and major currency pairs, cross rates. How to choose the right currency pair for successful trading

Good day, dear readers of the blog site! We continue to develop the topic of trading in the financial market, today we’ll talk about Forex currency pairs.

There are mirror pairs - when there is a clear upward trend on the chart of one instrument, and bears are in power on the chart of the other.

Let's take EUR/AUD and AUD/CHF as an example. The specularity is not as pronounced as the symmetry in the screenshot above, but still.

Euro exchange rate in Australian dollars.

Australian dollar to Swiss francs exchange rate.

Specularity does not imply absolutely opposite movements, just as symmetry does not guarantee complete coincidence. Because exchange rate dynamics are also affected by non-overlapping currencies. In the case of AUD/CHF, we observe a powerful decline on January 15, 2015, because the pair has a franc, while EUR/AUD does not and cannot have it.

What happened in January 2015 - we’ll talk about this in the final part of the material.

Designation of currency pairs and assessment of currency value

Currency pairs in the trading terminal are displayed only in one format, which has developed historically. There is, for example, a pair USD/RUB, but not RUB/USD. That is, we see the dollar exchange rate expressed in rubles, but we do not know how much the ruble is worth if we convert it into dollars.

How did we get here? Based on the property of proportion.

USD/RUB = 60. The quote reflects the cost of one unit of currency. Therefore, 1USD/RUB = 60. How many rubles we need to determine, so we take rubles as “X”. We get the proportion.

Multiplying units gives one. To find X, divide the product by 60, come to 1/60 = 0.01 (6), round, get 0.017.

Let me remind you that in the terminal the rate of each currency pair is indicated with 5 decimal places. There are brokers that provide quotes accurate to 4 digits, but they are few. Five characters are needed to determine the cost of an entire lot of a particular currency.

Why the five-digit designation appeared, read the article “What is the price.” Let's talk about some more interesting things there, in particular, about Dutch bulbs.

If the GBP/USD rate = 1.30305, then to determine the cost of a standard lot we multiply this value by 100,000. Because 1 lot is 100,000 units of currency. To multiply by one hundred thousand, we move the decimal point to five places - $130,305 - this is how much the broker will pay for our transaction.

How much will we pay? That is, how much money will we put down as collateral? Read it if you haven’t done so before, otherwise you won’t get far. The deposit depends on the leverage - if the leverage is 1:100, we will need $1,303.05, if 1:1,000, $130,305 will be enough.

We will talk about large corrective pullbacks in the article on wave analysis. Let's look at Ralph Elliott's wave theory there. Take note.

Exotic currencies are used by traders to make money on swaps, we have already talked about this before.

Let's learn everything about currency pairs

At first, it is advisable to choose 1 - 2 currency pairs for trading, gradually increasing the number of instruments. If you are speculating medium- or long-term, observing several pairs at the same time will not be difficult.

You need to know everything about the chosen financial instrument. Which countries own the currencies in the pair, on what fundamental factors they depend to a greater and lesser extent, how well they lend themselves to technical analysis. In the process of constant trading, you will find out whether the chosen instrument likes to present surprises and make spontaneous price jumps.

By the way, although currency pairs are traded around the clock, they also go to bed - at different times, the price movements of different instruments are not the same in intensity.

Forex is influenced by stock exchanges, which do not open and close at the same time in different countries. Trading sessions are distinguished based on their operating periods.

Here are the names of the sessions, their time intervals in Moscow and the currencies that are most intensively traded in each period. Exchanges are located in different cities, cities in different time zones. Therefore, sessions begin and end not at a specific moment, but within an hour.

During the American session, currency pairs with the US dollar fluctuate intensively, during the Asian session - with the Japanese yen, and so on.

Large states in the global economy are like neighbors in an apartment building. One country influences another in one way or another.

If you go to bed at night, and the neighbors upstairs are having a party, you will hardly be able to sleep a wink. The situation is similar in the financial market. When the Asian session begins and traders speculate on the Japanese yen, the Eurodollar cannot sleep peacefully and also reacts with price jumps.

We will talk about nuances of this kind in a separate article “Forex Trading Sessions”.

Let's return to the topic. It is especially important to know the spread and swap values ​​for a currency pair and the current volatility. Data on spreads and swaps are indicated on the website of the brokerage firm; in Alpari, the section is called “Contract Specifications”.

Look for information on the website of your broker only, since spread and swap values ​​vary from company to company.

Volatility is the amplitude of price fluctuations. To measure daily volatility means to determine the distance between the maximum and minimum price of a financial instrument during the day.

The price of a financial instrument is like a pilgrim traveling on foot. Every day a person on foot will cover different distances, but on average a young wanderer always covers a longer distance than an older one.

Moreover, the average speed is also a variable value. The air temperature, the condition of the road, and the general well-being of a person will either increase or decrease it.

It’s similar in the Forex trader’s toolkit: there are high-volatility and low-volatility pairs. The former are full of strength and are able to cover long distances, the latter move slowly and are in no hurry.

Learning to determine volatility

Let's go to the MetaTrader trading terminal and open the chart of any currency pair. I'll take EUR/CHF - the euro exchange rate expressed in Swiss francs.

To calculate volatility, first select the desired time interval. Let's say we want to collect data for the daily timeframe. The graph looks like this.

Let's move on to the calculations. There are two ways - simple and complex. Let's look at each one.

A complex way to calculate volatility

Each candle on the D1 timeframe chart reflects price fluctuations throughout the day. From the article, you remember that the Open and Close prices of a candle are the prices at the beginning and end of the trading day, High and Low are the maximum and minimum price values.

We need exactly High and Low. The distance between the stops that the financial instrument made does not matter, what is important is its reserve of strength - how much in total it strayed. Therefore, we measure the distances between the maximum and minimum price values.

This is done either by eye using a crosshair, or by precise calculations.

To use the crosshair, click either CTRL + F or click on the mouse roller. Enlarge the graph, measure the distance from one shadow to another.

1,902 minipips or 190.2 pips. The first value is based on the fifth decimal place, the second value is based on the fourth. It makes no difference which one to use. We write down the resulting value.

Now the method of accurate calculations. Move the cursor to the candle so that the data is displayed. Subtract the Low value from the High value.

1.14481 - 1.12600 = 0.01881. Removing all decimal places, we get 1,881 minipips - this is the distance the EUR/CHF financial instrument passed on August 9, 2017. With the crosshair, we got a value of 1902 - 11 minipips more - not critical.

If you don’t know how to get the data we used from candles, read either the above-mentioned article or watch the video.

We measure the second candle with a crosshair – 618 minipips.

The third – 589.

Let's assume we are interested in 3-day volatility. We add up all the obtained values: 1,881 + 618 + 589 = 3,088 minipips. We find the arithmetic mean - divide the amount by 3: 3,088/3 = 1029, (3) minipips - we get the current volatility.

How to track its changes? Keep a notebook and indicate new price values ​​and averages in it every day.

At first your entry will look like this.

In a day you will enter new data. The candle on the chart is still forming, the day has not ended, but let’s take its values ​​as an example. Distance traveled – 244 points.

We subtract 618 from the last sum, because this day is already eliminated, we are not interested in it. It turns out 2,470. We add the path traveled by the price today, that is, 244 points. Total – 2,714. Divide by 3, we get 904.7.

How many days to take into account when calculating current volatility depends on your trading strategy; traders’ approaches in this regard differ.

In the future we will get acquainted with indicator methods of analysis; there is no panacea there either. The Moving Average indicator will produce different values ​​depending on the number of days analyzed.

That's for 14 days.

Here's for 140.

The larger trends we want to catch, the more days we analyze.

What period should you use when calculating volatility? Let's look at the simple method of counting that was taught to me, and then answer this question.

A simple way to calculate volatility

Open the hourly chart of the selected financial instrument. Right-click “Properties”, go to “General”, check the box next to “Show period separators”.

Separators now appear on the chart. If we measure the distance between them, we get the mysterious number 24.

The first value displayed by the crosshairs is the number of candles in the measured interval. 24 candles, each reflecting fluctuations for 1 hour. This means that between periods fit a day - one Forex trading day. The foreign exchange market trades around the clock.

Measuring the distance between the High and Low of each candle on the daily time frame is tedious. It is easier to connect the maximum and minimum price values ​​within one period with a crosshair.

Ultra-precise calculations are not needed, we measure by eye. In the screenshot above, 1,886 points were received. Expand the terminal to full screen and measure the volatility of all periods that will fit completely, I fit 13 - 14 periods. I learned to trade using historical levels; according to my strategy, volatility data was needed to correctly apply them; 13 - 14 days is enough.

That's it, we've looked at this issue. If something is unclear, write in the comments, I’ll explain. We will analyze the levels in graphical analysis.

Which currency pairs to trade on Forex

Novice traders usually look for signals to enter the market based on technical analytics. Therefore, for a successful start in trading, it is advisable to choose the most technical currency pairs.

These include primarily EUR/USD. The famous Eurodollar is the most liquid and, perhaps, easily predictable Forex instrument.

The EUR/USD chart is perfect for implementing any trading strategy. Trend movements with rare “surprises” can be easily predicted by both indicator and technical analytical methods. A small spread is an excellent opportunity to engage in scalping.

The Eurodollar is also suitable for news trading, because its rate is affected by events in several EU countries.

Once you are comfortable with EUR/USD, take a look at AUD/USD and NZD/USD. The Australian and New Zealand dollars are low-volatile financial instruments; their prices do not make sharp jumps like currency charts when paired with the pound.

If you want to join long-term trends, the Australian and New Zealand are just right: it is safe to leave open positions on them for the weekend. However, you still can’t forget about gaps.

Start mastering Forex with the three above-mentioned currency pairs, then get acquainted with other instruments. Don't get into exotics until you've trained in major pairs.

In this article we learned how to configure the display of quotes. The terminal allows you to view several pairs simultaneously and make a large “universal” chart. Read it, it will be useful.

There you will also learn how to add new currency pairs to the workspace. But I don't think you have a problem with that.

Before you start trading a new instrument, collect information about it, find out about the “specifics” of each currency.

Please also take into account the fact that information tends to become outdated. USD/CHF is still called a highly technical instrument on some sites, but its technicality fell into oblivion on January 15, 2015.

On this day, the Swiss National Bank refused to hold the franc exchange rate and released the beast.

Nowadays, the Swiss currency is not among the elite of well-forecast ones.

At the beginning of the article we talked about mirror currency pairs. The strong depreciation of the Australian dollar in the AUD/CHF pair is precisely caused by the situation described.

Conclusion

Dear beginners and professional traders, we have finished the conversation about currency pairs and reviewed the most suitable tools for starting Forex trading. Ask your questions in the comments - I will definitely answer.

Are you interested in the patterns of movement of individual currency pairs? If yes, I will prepare for you separate descriptions of EUR/USD, AUD/USD, GBP/USD and other instruments.

The question of choosing a suitable trading instrument worries many stock speculators. What criteria should you focus on when selecting a currency pair?

5 nuances when choosing a currency pair for Forex trading

When choosing a suitable instrument for trading on the market, a trader must take into account the following nuances:

1. It is worth choosing a pair with high liquidity. This will allow you to conduct transactions with the maximum level of profitability.
2. It is necessary to take into account the size of the broker's spread for the selected instrument. You should not choose exotic currency pairs, since the commission on them is quite high and can reach 20-30 points. To earn significant profits when trading such instruments, you must have a substantial deposit.

As a rule, Forex market participants choose those currency pairs for which the spread is minimal. These include popular currency pairs, such as EUR/USD. The floating spread for this pair can be only 0.2-0.3 points; such values ​​allow you to avoid loss of profit.

1. When choosing a currency pair, you should focus on its volatility level. Novice traders are not recommended to trade highly volatile instruments, since trend movements in them are difficult to predict. Novice speculators should opt for quiet trading instruments. This will allow you to make reliable market forecasts and choose the right direction for the transaction.

1. The optimal choice is the currency pair for which a sufficient number of technical tools (scripts, strategies, indicators) have been developed. This will avoid problems with conducting technical market analysis and forecasting.

1. The selected currency pair must correspond to the one the trader uses. For example, if a market participant trades on news, then he should choose a pair of currencies for which there are enough news messages. To trade using this strategy, you can use the most popular Forex market instrument - EUR/USD.

When trading scalping, you need to choose currency pairs that are characterized by sufficient volatility. This will allow you to make a profit even from exchange rate fluctuations and open a large number of transactions during the trading day.

The choice of instrument for Forex trading is an important aspect of currency trading, on which the financial result of a speculator depends. That is why a market participant must focus not only on his own preferences, but also clearly understand how to choose a currency pair for Forex trading.

They are interested in: “Which currency pair is better to trade?” Many of them go to different extremes, some trade exclusively EURUSD, while others open trades simultaneously on several currency pairs. Today you will learn which currency pairs to trade and which ones you should not pay special attention to, and we will also analyze in detail the main characteristics characteristic of each currency pair separately.

What are the currency pairs?

First, you need to define what a currency pair is and what types of it there are. So, a currency pair is the abbreviated name for the two currencies that form. In this case, the entry displays the base currency on the left, and the quoted currency on the right. Thus, the EURUSD currency pair consists of a base currency (EUR) that is sold or bought for a quote currency (USD). Conventionally, Forex currency pairs can be divided into the following groups:

Majors (major currency pairs);

Cross courses (cross courses);

Exotics (exotic currency pairs).

It can also be classified as a separate group, which is written in pairs with the dollar (XAUUSD) or euro (XAUEUR).

Below we will consider which currency pairs are included in each group, what their features are and what financial instruments beginners and experienced traders can use in their trading.

Major Forex currency pairs

Major currency pairs include pairs in which the base currency is either the currency of other significant countries:

1. EURUSD– this is perhaps the most popular currency pair, which is traded in almost all countries of the world, due to which it differs from other currency pairs in its high liquidity and low spread. Most traders have focused their attention exclusively on EURUSD, since it receives a lot from information analytical agencies, and also lends itself to graphical analysis. Despite being the number one EURUSD in terms of trading volume, its volatility is no more than 100 pips per day, with most of its movement occurring during the London trading session, as well as influenced by news events such as the NFP and FOMC. Therefore, we do not advise novice traders to trade only on EURUSD, but recommend that they start trading on GBPUSD, in which price movements are the most predictable and pronounced;

2.GBPUSD is the second most popular currency pair, the movement of which is often repeated after EURUSD. It is characterized by high volatility (100-200 points per day) and large movements, which provides the opportunity for stable earnings. However, at the opening of the London session, GBPUSD very often shows long tails that break through horizontal levels, which causes false breakouts and stop losses to be knocked out, so Forex beginners should be careful when entering into trades on this currency pair. GBPUSD activity occurs in the London session, and in the Asian session volatility drops to 30-60 points. In addition, GBPUSD reacts well to the release of news related to the US, UK and Eurozone;

3. USDJPY is the third most popular currency pair, which is known for its strong trend movements and small spreads, while volatility can reach several hundred points, which makes it a highly profitable trading instrument. It is also worth noting the unpredictability of USDJPY, which is due to the unexpected entry of the Central Bank of Japan into the market. The government of this country takes care of its industries, reducing the exchange rate of the national currency from time to time, which helps to increase the competitiveness of Japanese goods on the world market. As a result, the price movement of USDJPY is quite difficult to predict and technical analysis. Therefore, trading USDJPY directly depends on your strategy; the Asian session is suitable for scalping, and the London session is best for scalping;

4. AUD/USD– compared to EURUSD, this currency pair has a slower price movement, therefore it is considered ideal for beginners in Forex. AUDUSD exhibits trend movements with small pullbacks, so it is suitable for trading. The Australian dollar is an agricultural currency, so the rate is most often affected by news related to rising prices for agricultural products, as well as weather conditions, since Australia is a country with an unstable climate. The greatest activity of AUDUSD is observed in the Asian session, and during the London and American sessions the trend is calmer;

5. USDCHF– the price of this currency pair historically moves in the opposite direction in relation to EURUSD, although recently there has been a decrease in the dependence of these currency pairs. Despite its high liquidity, the USDCHF currency pair is characterized by instability of movements, so it should not be used in trading by novice traders;

6. USDCAD very often used by traders in trend strategies and news trading. The most favorable time for trading is considered, since the markets of the USA and Canada are in close proximity, and close economic ties have been established between these countries. Thanks to these factors, USDCAD price dynamics are directly dependent on the outcome of economic events relative to the US dollar. In addition, there is a relationship between oil and the Canadian dollar. When oil prices go down, the Canadian dollar weakens and the trend goes up.

Cross rates

Cross rates are currency pairs that do not have the American dollar in their name. Such currency pairs usually have little activity, with the exception of pairs with the Japanese yen. Cross rates include the following currency pairs: AUDCHF, AUDCAD, AUDNZD, AUDJPY, CADJPY, CHFJPY, EURCAD, EURAUD, EURGBP, EURCHF, EURNZD, EURJPY, GBPAUD, GBPCHF, GBPJPY and NZDJPY. You should not use all currency pairs from this list in your trading; we recommend that you pay attention, first of all, to pairs with the yen except CHFJPY and CADJPY. Thus, the GBPJPY currency pair has maximum volatility and demonstrates strong movements, for which it received the name “Ferrari”. Since this currency pair shows sharp price fluctuations, it is best not to be used by novice traders. EURJPY also shows good movements, but is slightly inferior to GBPJPY. Due to the fact that EURJPY can be used in various strategies, that is, it is a universal currency pair.

Exotic currency pairs

Currencies of countries that do not influence the economies of other countries are classified as exotic currency pairs. They are characterized by high, low liquidity and poorly predictable movements. However, some traders study exotic charts of currency pairs on Forex and find certain patterns in them that help them earn good money. As a rule, due to the large size of the spread and low volatility, exotic currencies are not suitable for scalping and others, but due to good trend movements they can be used in long-term strategies. In addition, due to the high difference in interest rates, exotic currency pairs are used in strategies. Among the huge variety of exotic currency pairs, the following trading instruments are of particular interest:

1. USDRUB– since we live in Russia, many traders try to take advantage of this advantage by trading the Russian ruble. Increasingly, forecasts for USDRUB are being made by leading analytical agencies. The formation of the USDRUB price is directly influenced by oil prices, the state of the Russian economy and other fundamental factors. During the financial crisis, brokers increase spreads and other commissions. This currency pair is only suitable for experienced traders;

2. USDZAR– this South African currency has a persistent downward trend in price relative to the US dollar, so the price chart has been steadily moving upward since mid-2011. It is recommended to consider only purchases, setting a Buy Stop on a rebound from the trend line. Since USDZAR is quite large, and the position must be kept open for 2-3 weeks, it is better to open an account;

3. USDHKD– the peculiarity of this currency pair is that the Hong Kong dollar exchange rate is pegged to the American dollar. This trading currency pair is traded in a price range of 7.75-7.85, and since 2012 the range has narrowed to a range of 7.75-7.77 HKD per USD. Thanks to this circumstance, the USDHKD exchange rate is quite predictable.

Which currency pair should you prefer in Forex trading?

Before you start trading on Forex, you need to decide on the choice of currency pair. The following financial instruments are suitable for beginner traders: GBPUSD, USDJPY and AUDUSD. More advanced traders can add to their arsenal: EURUSD, GBPJPY, EURJPY, NZDUSD and XAUUSD (gold). Don't be afraid to experiment with currency pairs; perhaps you will find a trading instrument for yourself in the place where you least expected to find it.

Which currency pair to choose for trading?

Greetings, dear readers. First there will be information for beginners. The article will then look at some fairly serious aspects.

Currency pairs
A currency pair is two currencies that form an exchange rate and are the object of a trading operation.
A traditional currency pair entry includes currency codes and has the form: base currency/quote currency.
The base currency appears in the currency pair symbol on the left; it is bought and sold for the quote currency.
The quote currency (quoted currency) appears in the currency pair symbol on the right; it expresses the price of the base currency.
Currency pair EUR/USD (euro-dollar):
EUR - euro, base currency;
USD - US dollar, quotation currency.
Currency pair USDJPY (dollar-yen):
USD - US dollar, base currency;
JPY - Japanese Yen, quotation currency.
Currency pair GBPCHF (pound-franc):
GBP - English pound sterling, base currency;
CHF - Swiss franc, quotation currency.

Major currency pairs
The so-called majors, the main currencies - euro, US dollar, British pound sterling, Swiss franc, Japanese Yen - form the most traded currency pairs on the Forex market: EUR/USD, GBPUSD, USDCHF, USDJPY.
Next come the Canadian dollar, Australian dollar and New Zealand dollar and, respectively, the USD/CAD, AUDUSD and NZDUSD currency pairs.
Main cross-rate pairs: EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF.

Features of currency pairs:

Volatility of a currency pair. Volatility is the range of fluctuations of a particular currency pair over a certain time; the daily period is often taken into account. Accordingly, some currency pairs are traded, without sharp fluctuations, in a relatively narrow range, and some, on the contrary, have a large range of movement per day. Thus, the GBP/USD GBP/JPY pairs are highly volatile and working with them is recommended for those who trade using trading strategies designed for sudden and strong movements. Otherwise, especially with small deposits, you can quickly lose it. Some pairs, for example EUR/CAD, EUR/AUD are trading relatively calmly, in a small range. Even less volatile are USD/CHF, EUR/USD, USD/JPY, EUR/CHF and many traders trade on them. The calmest pair is EUR/GBP; fluctuations in it are slightly lower than in most currency pairs.
Time of greatest activity. Any currency pair has its own specific time of maximum activity. Thus, EUR/USD and GBP/USD are inactive during the Asian session and they are most active during the European and American trading sessions. Therefore, when trading them during the Asian session, multiple false signals are possible. It is recommended to use the currency pair that is active during a particular trading session.
Correlation of currency pairs. Since different fundamental factors affect all currency pairs with greater or lesser force, the movement of some currency pairs occurs simultaneously, while the movement of other pairs occurs with a small time lag. Allied currencies are distinguished. In this case, the movement of some pairs causes movement in a certain direction of other pairs with a high degree of probability and opposing currencies when currency pairs move in the opposite direction. So, to open transactions with a high probability on EUR/USD and GBP/USD, it is important to break through support or resistance levels with all pairs, namely AUD/USD breaks through levels in one direction, and USD/CHF, USD/CAD,USD/JPY in the opposite. You should study the correlation of currency pairs and use it when opening positions, but you should not rely on this indicator completely.
Trading several currency pairs simultaneously. Trading several currency pairs at the same time requires certain skills in tracking them and is quite complex. Therefore, it is unlikely to be suitable for trading by novice traders.
Characteristics of currency pairs:
EUR/USD is the most liquid and popular currency pair. This is due to the low low trading costs (spread).
GBP/USD was a highly volatile pair a couple of years ago. Day traders loved trading it. But now times have changed and the volatility of the pound is comparable to the volatility of the euro. Beginner traders can trade this pair, but with caution. It reacts strongly to political events and economic data from the UK, so news from this country should be closely monitored.
USD/JPY is one of the most difficult currency pairs to predict, with unexpected and sharp moves often leading to losses. Forecasts of the dynamics of the movement of the USD/JPY pair are considered the most inaccurate. The couple sometimes reacts strongly to political and economic events. And sometimes he doesn’t react to the news at all. It may be in consolidation channels for months without sudden trend movements. Beginner traders should not trade this currency pair.
USD/CAD. Is a commodity currency pair. Its movement closely correlates with the dynamics of oil prices - the Canadian dollar grows when oil prices rise, so it is important to monitor the trends and forecasts of the oil market. Not recommended for novice traders or should work with USD/CAD very carefully.
AUD/USD and NZD/USD. Currency pairs that behave very similar. They are greatly influenced by weather conditions and metal prices. When metal prices fall, as well as bad weather, the AUD/USD and NZD/USD rates usually decline. An increase in the price of metal contributes to the growth of the exchange rate of these currencies, but good weather has virtually no effect on the movements of currency pairs. Suitable for trading by novice traders, the focus should be on technical analysis and metal prices.

Dangerous currencies for extreme sports enthusiasts

EUR/JPY. A very unpredictable currency pair. For beginners it is a very complex financial instrument. Forecasts of its movement are often unreliable and erroneous.
GBP/JPY. An extremely dangerous and unpredictable currency pair. Beginner traders should avoid trading this pair.

When trading on the Forex market, the issue of choosing a currency pair is always relevant for beginners. The success of the transaction will largely depend on what monetary combination is used. To make the right decision, you should understand the nuances of different currencies.

What is a currency pair as an asset?

When trading on the Forex market, currency acts both as a commodity and as a means of payment. When purchasing monetary units of one state, you must pay in another currency. In this way, currency pairs are formed, which are the trader’s underlying asset.

The currency being purchased is called the base currency, the other is called the quoted currency. The base currency is taken as a unit, the quoted currency shows how much money the base currency is worth.

For example, EUR/CHF=1.1404. This means that for 1 euro you need to pay 1.1404 Swiss francs.

To designate one monetary unit, a standard three-character code is used, which is deciphered as follows:

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• the first two letters are the country of the currency;
• the third is its name.

A currency pair is written as follows: abbreviated names of two monetary units appearing sequentially or separated by a slash.

Important! All combinations are written in a certain sequence. They cannot be swapped. For example, the EUR/GBP pair exists, but the GBP/EUR pair does not.

Types and categories of currency pairs

All of them are divided into 3 categories:

• majors or fundamentals;
• cross courses;
• exotic.

To figure out which currency pairs are better and easier for beginners to trade on, you need to study their basic properties.

Major pairs

The main combinations make up the currencies of countries with the most developed economies:

• Japan;
• Great Britain;
• Canada;
• Switzerland.

Majors are the most popular and liquid. There are only seven of them, but they account for more than 70% of Forex trading.

Euro and US dollar – EUR/USD

This pair is the most traded and popular among traders and is considered highly liquid. However, due to the large number of players, it is difficult to predict, so beginners should be careful when choosing it.

US dollar and Japanese yen – USD/JPY

This combination is sensitive to political events. Its quotes are subject to sharp fluctuations. Forecasts of the dynamics of its movement, which are carried out by financial institutions, are often erroneous.

British pound and US dollar – GBP/USD

The pair is highly exposed to political and economic news in the UK and is considered highly volatile. Most popular among traders focused on short-term trading.

Australian and US dollars - AUD/USD and New Zealand and US dollars - NZD/USD

The behavior of these pairs is largely similar; it can be predicted using technical analysis. They are influenced by the cost of metals, as well as the weather. An increase in metal prices leads to an increase in exchange rates, and a decrease and bad weather conditions lead to a decrease.

US dollar and Swiss franc – USD /CHF

This combination is well predicted. It is also characterized by high liquidity and the absence of sudden changes in value. It shows well the dynamics of the American currency.

US and Canadian dollars – USD/CAD

The dynamics of the behavior of these monetary units depends on the price of oil. The value of CAD increases as it increases. Therefore, when trading this pair, it is important to monitor oil market trends. American experts make good forecasts for this combination.

Cross pairs

Cross pairs differ in that they do not contain the US dollar. Most currencies are pegged to the US currency, so they are exchanged for it first and then for each other. Thus, the value of the currency is assessed in 2 stages. In this case, the term cross-rate is used.

For example, cross rate EUR/JPY = (EUR/USD) x (USD/JPY).

Here are some types of cross pairs:

• British pound and Japanese yen – GBP/JPY;
• euro and British pound – EUR/GBP;
• Canadian dollar and Japanese yen – CAD/JPY;
• euro and Australian dollar – EUR/AUD.

A feature of cross pairs is high volatility. It should also be taken into account that the commission size when working with them is higher than when trading majors.

Exotic couples

Exotic pairs form the major currencies and monetary units of developing countries. For example:

• US dollar and South African rand – USD/ZAR;
• US dollar and Mexican peso – USD/MXN.

Exotic combinations are characterized by low liquidity and large spreads. They are poorly forecasted and considered very risky to trade with.

How can a beginner choose a currency pair in trading?

Beginners in the Forex market, when choosing a currency pair, should take into account its main indicators:

1. Liquidity depends on the relationship between supply and demand.
2. Volatility is the intensity of price changes over a period of time.
3. Predictability is the ability to predict the behavior of a currency.

It is better to choose low-volatility and highly liquid pairs for trading transactions. When taking your first steps in trading, you should work with calm and easy-to-analyze currencies. Which of the traded pairs are the most suitable? Experienced traders advise choosing the following combinations:

• EUR/USD;
• GBP/USD;
• NZD/USD;
• AUD/USD.

Exotic pairs are not suitable for beginners, as they are difficult to analyze. You should not start working with several currencies at the same time. It is better to focus on one, or at least two pairs.

Having learned to trade on the main pair, in the future you can choose other currency combinations. Choosing a currency pair is as important an aspect in trading as the ability to manage your own capital and emotions. The success of a novice trader and his profit depend on this knowledge.