Best Currencies to Trade in Forex …
Best Currencies to Trade in Forex
It is, or should be, obvious that the best currencies to trade in Forex are those that will make you the most money. With the use of an alert service one can spot the best currencies to trade in Forex based on market volatility. However, the best currencies to trade must also be those which trade in high liquidity, high volume, and with transparency. Technical analysis of Forex pairs is easier and commonly more profitable in the major currencies. Fundamental analysis of Forex pairs is also more accurate in the major currencies making these the best currencies to trade in Forex.
Majors versus Minors and Technical Analysis
Technical analysis in the Forex market is a statistically based operation. A given price pattern can be highly indicative of a coming price increase or fall. In a sense history repeats itself and Forex technical analysis uses the past to predict the immediate future. Statistics work better when the numbers are larger. Thus technical analysis of major pairs is more accurate than technical analysis of minor Forex currencies. There is more money in the major currencies which increases the amount of trading but because better analysis begets better results this also increases the trading volume, liquidity, and profit potential.
Major Forex Currencies
In general the best currencies to trade in Forex are the majors. This are:
United States Dollar, USD
British Pound, GBP
Swiss franc, CHF
Canadian Dollar, CAD
Australian Dollar, AUD
These currencies are most traded and are tied to strong economies. Because of their high trading volume technical analysis of major Forex currencies tends to be much more accurate and more likely to lend profits to Forex technical strategies than with minor currency pairs.