Among the hundreds of currencies available in the forex market, there are numerous Pairs available to trade in forex. However, there are only eight listed as being the most traded currency pairs. Not all the pairs are suitable for traders. According to the traders’ trading experience, one should choose their preferred currency pairs based on their expertise, skills, and risk management.
In this article, we will be shedding light on the basics for beginners or novice traders who are enthusiastic about educating themselves on how to trade.
Then, what are the best currency pairs for you to trade in forex?
Should you be trading fewer forex pairs or countless to get familiar with the market?
Is it better to stick to one to two forex pairs as a beginner?
Why should you choose fewer forex pairs than more?
Here, you can learn about all the inquiries you may have in-depth.
The Forex, or Foreign Exchange Market, is a very complex and unpredictable industry to trade in and begin to earn a living from, let alone achieve the financial freedom that everyone desires. There is tremendous profit potential for traders, but only for those who are skilled, strategic, and experienced.
However, it is not so hard to earn a healthy profit from the forex market even if you are a novice trader.
You must be wondering how, aren’t you? Let us explain.
As a beginner, you should focus on learning how to trade and comprehend technical analysis thoroughly. And from the beginning, if you choose to trade in 8 to 10 of the most liquid currency pairs, you will be nothing but a lost soul.
Choose One to Four forex pairs to start with:
To learn about forex trading, you must focus on one to a maximum of four forex pairs to understand the market and analyze its every little movement inside out. Many people make mistakes, believing trading with more pairs will bring more profits. This is absolutely wrong. Each pair acts independently, and it is very difficult to keep track of multiple forex pairs if you trade every pair simultaneously.
There are many successful seven-digit earners who trade no more than four pairs as their only source of income. Focusing closely on fewer but low-spread and highly liquid pairs can bring more and definite profits to the trader.
Which is the ONE currency you should look out for?
The answer is the US Dollar (USD).
The US dollar is the most traded currency in the world, with the Euro coming in second. That is why the best pair would be EURUSD. This pair holds the tightest spread and most liquidity in the market. Due to its drastic movement caused by volatility, this pair is the best to enhance traders’ trading knowledge as well as comprehend how unpredictable the forex market can become. You can find unlimited resources and analysis lessons for EURUSD.
However, sticking to one pair would limit your trading enlightenment because each currency pair acts in a different way. Each has their own personality.
That is why veteran traders often suggest to start trading with at least four currency pairs. The top pairs are EURUSD, GBPUSD, USDJPY & AUDUSD.
Things to keep in mind while starting trading in forex:
– It is best to start with one currency pair, but if you are trying to learn quickly and thoroughly about how the market works, you should choose a maximum of four pairs.
– Each pair acts differently. Therefore, monitoring the market constantly will help you understand the uniquality of the pairs.
– Start with demo trading rather than investing money before knowing anything about the forex market.
– Take small and recoverable steps while initiating the trade.
– First plan and draw your own trading strategies, then jump into trading. Each currency pair has its own personality, which requires separate strategies each time.
Forex trading is not a child’s play that you open an account and start earning like a pro player. No, that is not how things work. Statistically, for a beginner, it takes 6 to 9 months of Complete and Dedicated Engagement to become an average trader in the forex market. After that, you will have to follow a path of gathering knowledge via experience. Therefore, we recommend you become a trader, but that has to be a wise and well-thought-out decision rather than an impulsive one to earn easy money.
From now on, we will be posting regular educational and beginner’s training blogs here. So, keep an eye here for further information.
