The Best Forex Pairs to Trade

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Get ready for a deep dive: we’re pursuing the most profitable Forex pairs. At forexstore.com, you can trade major, minor, and exotic pairs, with over 300 options available. You’ll learn about the basics and peculiarities of each type of currency pair and master how to trade them correctly to achieve the best profitability.

Factors to Consider When Choosing Forex Pairs

A currency pair refers to the exchange rate between two different currencies. In Forex, you always trade in pairs: buying one and selling the other simultaneously, effectively exchanging one currency for another. In a pair, there’s the base currency and the quote currency — the second in the pair. So, in the pair USD/EUR, USD is the base currency, and EUR is the quote currency. Interestingly, the best EA for Forex trading is adapted to work with specific types of currencies because various factors, such as economic and political events, can influence exchange rates. Therefore, the algorithms of the corresponding software products are tuned to maximize consideration of the signals impacting pricing, ultimately affecting the profitability of Forex trading as a whole.

In 2024, the most profitable Forex pairs included those incorporating the US dollar, Japanese yen, British pound, and Canadian dollar. Additionally, the euro and Australian dollar have remained among the most popular currencies for trading for many years. Pairs involving these currencies are highly liquid and have moderate levels of volatility (price instability), and trading operations in these directions have the lowest spreads, creating excellent opportunities for day trading.

In less liquid exotic pairs, spreads are wider, and volatility is higher due to the instability of the economies of the countries where these currencies function. The same factors influence sharp price fluctuations as in the case of major currencies: central bank policies, political and economic events on an international and regional scale, market sentiment, news releases, and so on.

Considering these features, several rules can be highlighted for finding the best Forex pairs to trade during each session.

Volatility

Volatility directly impacts potential profit and is also a risk factor. If the price of a currency pair moves, it allows for successful trades, but you must always pay attention to trends and indicator signals, as price movements can occur in both directions, creating conditions for profit or loss accordingly. High volatility is demonstrated by pairs such as GBP/USD, USD/JPY, EUR/USD, and EUR/GBP.

Aligning Active Trading Sessions and Trader’s Working Hours

Understanding not only volatility but also activity during trading sessions is equally important. Price movements during active trading are a crucial factor in choosing a trading pair, especially if you adhere to day trading strategies. Price fluctuations in some pairs occur when the trader is absent and does not have access to the platform. Therefore, you either have to engage a trading robot that will perform the necessary operations while you cannot participate in trading independently or choose pairs in which the most active price movement coincides with the selected trading session.

Overall, the trading day in Forex is divided into four sessions: from Australia and Tokyo, opening on Sunday evening, to London and, finally, New York. In most cases, a trading pair is active when its internal stock market is open. Following this principle, the most active operations with the US dollar occur during the open session in New York, and the best trading for the EUR is observed during the open session in London.

Accordingly, the peak of exchange operations in the EUR/USD direction occurs when both markets are open (London and New York). Therefore, when choosing the best trading pair, you must consider whether you can be present during the trading process at the hours with the most opportunities. Trading currency exchange is also possible at other times, but the chances of finding optimal and profitable options decrease significantly.

Popularity of Currency Pairs

By choosing the best-traded pairs, you enter a path where you work with highly liquid assets, thus with lower risks. Popular directions are the best Forex pairs to trade for beginners, as spreads are narrow, and the opportunity for trading operations is broad. Therefore, it makes sense to start by trying your hand at trading by choosing EUR/USD or USD/CAD.

Pay Attention to Economic Factors

Details such as interest rates, central bank policies, GDP growth, inflation rates, and employment data — all these factors affect each currency. Accordingly, this is reflected in the profitability of trading operations.

Align Pair Selection with Your Strategy

When specializing in trend trading, it will be easier for you to work with currency pairs where there is a clear and constant dependence on trends. If you prefer and find it more convenient to adhere to strategies with a limited range, it is better to choose currencies with clearly defined support and resistance levels. Match these criteria with the trading style you are accustomed to and determine which pair is best suited for you to focus on.

Major Forex Pairs

Major Forex pairs are the primary currencies traded most frequently and represent the largest economies globally. These pairs include:

  • EUR/USD
  • USD/JPY
  • GBP/USD
  • USD/CHF
  • USD/CAD
  • AUD/USD
  • NZD/USD

These major currency pairs account for the majority of trading volume in the Forex market and are characterized by high liquidity, tight spreads, and significant price movements, making them popular among traders worldwide.

EUR/USD

The EUR/USD pair has the highest daily volume (22.7% of the total market volume according to BIS data). High liquidity opens access to narrow spreads (transaction commissions), giving traders more advantages as a result.

Trading “Gopher” (USD/JPY)

The trading volume here accounts for 13.5% of the total trading volume. This pair is highly sensitive to international political relations between the US and the Far East. The exchange rate also reacts to changes in interest rates at the Bank of Japan.

Trading “Cable”

This is the term for working with the GBP/USD pair. The name originated from the laying of steel cables across the Atlantic Ocean in the 19th century for faster data transmission between the US and Great Britain. Today, fiber-optic cables are used instead, but the essence remains unchanged: the speed of receiving the freshest information affects profitability. The GBP/USD pair holds a 9.5% share in the Forex market. The popularity of the pair is due to both historical context and the strength and power of the economies of these two countries, thus relative stability and predictability of prices.

USD/CNY

The popularity of this pair is growing with China’s influence on the international stage. Meanwhile, political and economic relations between the US and China are extremely unstable, creating favorable conditions for speculation on the exchange rate.

Trading “Loonie”

The popularity of the USD/CAD pair is also growing, reaching 5.5%. Price formation is influenced by the price of oil worldwide, especially in Canada, as oil production is the driving force of the country’s economy. Other political and economic events have a somewhat lesser impact.

Minor and Exotic Forex Pairs

Minor currency pairs are those that still offer traders favorable trading conditions but are not as widely traded because they do not include the US dollar. In contrast, all major currency pairs include USD. This is because the US economy is considered the most powerful, the government is stable, and support for the dollar is the most significant in the world.

Minor pairs do not include USD, so they are traded with wider spreads and have lower liquidity (they may be harder to exchange). Nevertheless, popular minor currency pairs (such as Euro to British pounds, GBP to JPY, or Euro to Swiss francs) still create opportunities for decent profits.

The liquidity situation is somewhat more complex when it comes to exotic pairs:

  • EUR/RUB
  • USD/TRY
  • USD/CLP

It can also involve trading Polish zloty, Danish kroner, Hungarian forints, and so on.

Best Forex Pairs for Different Trading Styles

Choosing the optimal trading pair that aligns with the characteristics of your trading style can lead to increasing profits. Several tips and secrets can help you make the right choice.

Scalping

Scalping involves making quick short-term trades to profit from small price fluctuations. The main profitability is achieved through volumes and the number of trading operations carried out during the working session. Therefore, pairs with narrow spreads but showing short-term price fluctuations are needed here.

Best choices:

  • Euro/US Dollar
  • GBP/USD
  • USD/JPY

Day Trading

Day trading somewhat resembles scalping in that a trader’s earnings come from the difference between the purchase and sale price of the asset, but if scalping focuses on short-term deals, positions here can be held for several hours. For successful implementation of this strategy, a currency pair with moderate volatility, narrow spreads, and high trading volume is needed.

Best solutions for implementing this strategy:

  • Euro/US Dollar
  • USD/JPY
  • GBP/USD

Swing Trading

The feature of this method is to obtain the best price that will be reached over several days or weeks. Accordingly, for swing trading, pairs with a wide price range and clear and stable trends are needed.

Optimal choice:

  • Euro/US Dollar
  • GBP/USD
  • AUD/USD

Trend Following

The method requires monitoring market trends and sentiments, forcing traders to hold positions over a long period. Considering this feature, pairs with strong long-term price trends confirmed on multiple timeframes should be chosen.

Optimal choices for this trading style:

  • Euro/US Dollar
  • GBP/USD
  • USD/JPY

Range Trading

Range traders operate within clearly defined trading ranges. Traders in this case adhere to trading within a certain price range and rely on support and resistance levels.

Best trading pairs suitable for this strategy:

  • Euro/Swiss Franc
  • USD/CAD
  • AUD/New Zealand Dollar

Carry Trading

This method is based on holding positions for weeks or months, and the main profit for the trader comes from the difference in interest rates between currencies. Therefore, it is recommended to work with currency pairs that have simultaneously stable economic indicators but a significant difference in interest rates.

Optimal choices for carry trading may include:

  • AUD/USD
  • NZD/USD
  • USD/TRY

News Trading

To profit, a trader tries to keep up with news releases, announcements, and events occurring both globally and in specific regions. Considering this feature, news traders may consider pairs such as:

  • USD/CAD (for Canadian economic data)
  • EUR/USD (for Eurozone economic data)
  • USD/JPY (for Japanese economic data)

Therefore, to choose a currency pair, you need to consider not only volatility or trading volumes but also take into account the trading style you intend to follow in your work. This way, you get a chance to improve performance, earn more, and leverage the characteristics of each currency to your advantage.

Summary

Considering all the facts presented, it turns out that the best currency pair for trading in the Forex market is the one that is closest and most understandable to you and with which you are familiar. Furthermore, you can use indicators, follow the news, and track trends, and all of this will enhance your performance. However, at the beginning of the journey, it is worth using the following algorithm:

  1. Learn all about trading styles and choose the one that suits you best, taking into account your risk tolerance, the availability of free time within trading hours, etc.
  2. Learn about the characteristics of each type of currency pair: majors, minors, exotics.
  3. Match your trading style and strategy in Forex with the types of currencies that best suit your plans.
  4. Familiarize yourself with several pairs and choose the one you are most familiar with.
  5. Start trading, and either improve your skills by working in a particular currency pair or choose another one if practical experience shows that you can achieve more by switching to another pair. Using the advantages of automated trading, you can trade multiple pairs simultaneously.

Remember that the recommendations regarding currency pairs mentioned above are approximate because the Forex market is extremely dynamic and reacts sensitively to any events in the world, trends, etc. Accordingly, what worked a year or five years ago may work differently now. Forex requires traders to be flexible and constantly engaged in understanding the intricacies of market functioning.

If you find it difficult to make a final choice, give yourself time, try different options with a demo account, test everything, and only then proceed to trade with real capital.

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