What is the best currency pair to trade in Forex?
For this reason, in this article, we are going to discuss the types of currency classification and see which type is more suitable for Forex beginners. In other words, we want to take a look at the best currency pair to trade in Forex
The world of forex trading can seem very confusing and overwhelming for beginners and novice traders. For this reason, in this article, we are going to discuss the types of currency classification and see which type is more suitable for Forex beginners. In other words, we want to take a look at the best currency pair to trade in Forex.
Currency Pairs Definition
When it comes to buying a currency pair to trade in Forex, it means that there is an intention to buy one base currency in exchange for delivery of another currency. Thus, a purchase offer is made which determines the amount required to receive one unit of the base currency. At the time of selling currency pairs, the exact opposite of what was said happens. Thus, a proposed price for sale is determined for the base currency and another proposed currency is received accordingly. The nature of the currency pair to trade in Forex is different from the stock market (Trade and exchange market). In the stock market, for paying a certain amount, a certain number of shares of an economic enterprise is allocated to the buyer; but in the currency pair to trade in Forex, what happens is the exchange of currencies with each other.
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Types of the currency pair to trade in Forex
The concept of currency pair to trade in Forex was discussed in detail. The important point in this regard is that currency pairs in the market are divided into three categories, Major Pairs, Crosse Pairs, and Exotic Pairs. In the following, we will introduce the types of forex currency pairs.
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Pairs This category of currency pairs can be called the best currency pair to trade in Forex. The reason for naming this category of trading currency pairs as the major forex currency pairs is that more than 85% of the financial transactions of the forex currency pair market during the day usually take place on them. The important point and in fact, the commonality of the main currency pairs is that one side of all these currency pairs must be the US dollar. The US dollar is considered the most powerful international currency and it can be claimed that the US dollar is the foundation of other Fiat currencies in the world. In this regard, major currency pairs are categorized as follows: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/CAD, USD/JPY, USD/CHF
. Crosse Pairs
Crosse currency pairs are a group of minor currency pairs, none of which has the US dollar, but at the same time, significant transactions are made around them in the market. In other words, this category can also be classified in the row of important Forex currency pairs. Most of the transactions in this direction are also done with the presence of the Euro, British Pound, and Japanese Yen. In this regard, Crosse currency pairs can be summarized in the following categories: EUR/GBP, EUR/JPY, EUR/CHF, EUR/AUD, EUR/CAD, EUR/NZD, GBP/AUD, GBP/CAD, GBP/CHF, GBP/JPY, AUD/CHF, AUD/NZD, AUD/JPY, AUD/CAD, CAD/JPY, NZD/CAD, NZD/JPY, NZD/CHF, CHF/JPY
· Exotic Pairs
Exotic Pairs consist of two currencies, one of which includes major currencies and the other includes currencies of developing economies. In this regard, the most important strange or unusual currencies that are traded in the forex currency pair include EUR/TRY, USD/HKD, NZD/SGD, GBP/ZAR, AUD/MXN, and JPY/NOK.
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Which forex pairs are best for trading?
The largest volume of global trade in the financial markets is related to the Forex currency pair market. Answering the question of what is the best currency pair to trade in Forex is not an easy task; because it is completely dependent on the trader's strategy for buying and selling major and minor currency pairs. Factors such as the type of transaction, the volume of the transaction, and the degree of riskiness of the trade are directly effective in choosing trading currency pairs. The only thing that needs to be mentioned in this section is that if you have just entered the Forex currency pair market, you must consider trading on the major currency pairs; because the price fluctuations of these currency pairs are less in the short term and thus the security factor of your capital increases. Thus the best currency pair to trade in Forex for beginners to trade are the major currency pairs.