Which currency pairs to trade?

When you first login to your forex trading account you’ll see a wide range of different currency

pairs available to trade.

Broadly speaking, currency pairs fall into three main categories:

Majors

There are six ‘major’ currency pairs. Each has its own nickname too.

1. EUR/USD (“Euro”)

2. GBP/USD (“Cable”)

3. USD/JPY (“Yen”)

4. USD/CHF (“Swisse”)

5. AUD/USD (“Aussie”)

6. USD/C AD (“Loonie”)

EUR/USD is the world’s most traded currency pair accounting for more than a quarter of all

forex trades, closely followed by USD/JPY and GBP/USD.

Crosses

The ‘crosses’ are those currencies that are not paired against the US Dollar. There’s typically a list

of well over 20 crosses to choose from.  The most popular ones are GBP/JPY, EUR/AUD, and EUR/

GBP.

Exotics

The ‘exotics’ are those pairs that include a currency from a developing or emerging economy. The

most common exotic pairs are:

•

USD/TRY – US Dollar v Turkish Lira

•

USD/ZAR – US Dollar v South African Rand

•

USD/MXN – US Dollar v Mexican Peso

•

USD/SGD – US Dollar v Singapore Dollar

Exotic currency pairs tend to be much less liquid and therefore more volatile than the majors or

crosses.

They also tend to have a much higher ‘spread’ (the difference between the buy and sell price)

which makes them more expensive to trade.

We would recommend as a beginner that you stick to trading the majors and a small selection

of crosses.

This ensures that your trading costs are minimised and your ability to exit positions isn’t

compromised.