Currency trading is a complex work. Traders need to look for a lot of factors and multipliers to build a positive scenario from themselves. People go both ways quickly in the forex market, from rags to riches and riches to rags. It only takes a loose step and an unplanned move to lose all your money.
Currency pair trading is a form of forex trading where one currency’s price is quoted in terms of the other and is held in pairs. The first currency listed is the base currency, and the second is the quote currency. EUR/USD is the most traded currency pair of all times, with USD/JPY being the second most traded one. When an order for a currency pair is placed, the base currency is bought, and the quote currency is the one being sold.
There are 6 major currency pairs that have the highest trade volumes. Let us know about the names and brief details of each of them.
What are major currency pairs?
Major currency pairs on 500pips are those currency pairs that have USD paired with them either in the base currency form or the quote currency form. These are the pairs that have the highest trade volumes and often come from developed countries. If the USD/JPY is 1.7500, then that means 1 US dollar is exchanged for 1.7500 Japanese yen. This is how the valuation works. The 6 Major currency pairs are:
- EUR/USD or the Euro vs. the U.S. dollar
- USD/JPY or dollar vs. the Japenese yen
- USD/CHF or the Swiss franc vs. the dollar
- USD/CAD or the Canadian dollar vs. the U.S. dollar
- GBP/USD or the British pound vs. the dollar
- AUD/USD or the Australian dollar vs. the U.S. dollar
Now that we know better about currency pair trading and 6 Major currency pairs of forex trading let us now proceed further with our 5 Ways To Do Currency Pair Trades.
5 Ways To Do Currency Pair Trades
These are some of the tried and tested methods from top traders around the globe. You can follow these to ace your game, but always remember, the final strategy and plan should always be yours.
Trade In Major Currency pairs
Trading in Major currency pairs comes with great flexibility and liberty since these are highly liquid in nature, and you can bail out quickly.
Diversify your portfolio
It is true that some people have made tremendous money trading in only forex currency pairs but that only applies in some cases. Diversification of the portfolio can reduce the risk.
Improve Knowledge
When you are trading for currency pairs, you need to know the countries involved, Also note that you should always have great knowledge about what’s happening in the United States as it largely influences the world forex market.
Be patient
Don’t fall for quick gains if you have trust in your planning and research. Stay patient and make profits by selling and buying at the right time.
Analyze and plan yourself
Never see other people’s plans and change your strategy. Every strategy works differently for different people. You can never win by riding on someone’s shoulder.
Conclusion
A good strategy and faith in your actions can yield great returns. Once you understand the math properly, it is only a matter of time when you can start making profits. Always remember that one bad decision can make everything vaporize in a fraction of time.
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