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Best Currencies to Trade in Forex
 

Best Currencies to Trade in Forex

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Best Currencies to Trade in Forex ...

Best Currencies to Trade in Forex

http://www.theforexnittygritty.com/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
Euro, EUR
British Pound, GBP
Yen, YEN
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.

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    Best Currencies to Trade in Forex Best Currencies to Trade in Forex Presentation Transcript

    • 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 Euro, EUR British Pound, GBP Yen, YEN 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.
    • Here are the top fifteen currencies by percentage of transactions in which they are traded.
    • Top Fifteen Currencies by Percent of Daily Trades, 2010 Data Currency Percent of Daily Trades US Dollar 85 Euro 39 Yen 19 British Pound 13 Australian Dollar 8 Swiss franc 6 Canadian Dollar 5 Hong Kong Dollar 2 Swedish Krona 2 New Zealand Dollar 2 South Korean Won 2 Singapore Dollar 1 Norwegian Krone 1 Mexican Peso 1 Indian Rupee 1
    • As we see from the preceding information, the USD dollar is used in nearly half of all Forex trades.
    • Part of this is because many minor currencies only trade versus the US dollar.
    • As such, one trades minor currency A for US dollars and then US dollars for minor currency B.
    • Within the major currencies there can be substantial price action. The fundamentals are easier to read because the economies of Europe, Japan, the USA, Canada, Australia, Great Britain, and Switzerland are highly developed and facts are relatively easy to come by.
    • There may be significant price action in minor currencies but one commonly needs to have inside information in order to make an informed decision as to which trades to make and when to make them.
    • The best currencies to trade in Forex are the ones that combine the best profit potential with the least risk of loss.