Which Currency Pairs Should I Trade?

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The Forex market has a large list of currency pairs which traders can choose to trade. Each country or economic zone offers their currency in an exchange with another currency zone, which creates dozens of currency crosses. The best way to day trade forex pairs varies from the most famous i. Eight methods are mentioned for you best way to day trade forex pairs choose the best ones, including currency correlations.

Selecting the best pairs depends on your strategy. Obviously, if the EURUSD is a trend then this is a great currency pair for a trend trader, but not so good for a range or reversal trader. Basically, you want to select the pairs which have the best match with the market structure you are looking for in the strategy. If you use this method, then it is certainly possible that a pair which was interesting in the past becomes less interesting in the future; and vice versa.

For instance, if you are a trend trader and the EURUSD breaks out of its consolidation to start a downtrend, then this price action and the pair would become interesting. This is a considerable disadvantage as more risk is taken without any diversification benefit. Selecting the best moving pairs depends on avoiding over-reliance one currency. When you only trade one currency against all other currencies, you have all of your eggs in one basket. This means that if the Euro drops and you are long on a numerous Euro related crosses, then chances are high that you are losing many of those Euro longs.

Hence it is usually better to spread the risk and choose a variety of currencies. You can opt to include some Euro pairs but also choose some non-Euro pairs to make your overall approach more balanced. Selecting the best moving pairs depends on your strategy mix. Of course, if you are trading with a single strategy then this factor is irrelevant. But for those that trade multiple strategies, it is smart to analyze whether your strategies are not over-reliant on the same or correlated currency pairs.

Even though the strategies are different, there could be increased risk associated with trading the same pairs from a portfolio perspective.

Selecting the best moving pairs depends on choosing tools and indicators. The most important factor is that you gain experience with the tool and indicator or your choice. It is your knowledge, familiarity, and practice with it that gives you the edge. However, for example, useful tools and indicators for selecting pairs could be Fibonacci, ATR, oscillators, trend lines, moving averages, etc.

Selecting the best moving pairs depends on your personal choice and preference. Your forex experience with currency pairs is very valid and you can use it for selecting pairs. Having a track record on how particular pair moves in conjunction with your strategy will help you identify the more profitable pairs. Your best way to day trade forex pairs also depends on the time available for analyzing, monitoring, trading and managing various currency pairs.

You might discover that the currency pair you have added to your trade list is, in fact, one pair too much to handle. Each currency pair has its own particulars and characteristics. Some of them will go along more with you and your strategy than others. Selecting the best moving pairs depends on selecting pairs that a decent number of traders actually trade and which have decent spreads. Although for instance, the currency pair GBPZAR could have a perfect setup according to your strategy, whether you would want to trade this pair is a question mark.

The best pairs are the majors and major crosses. Most traders want to stick to these pairs unless there is a specific reason to do trade others. Which of the above factors is most important for YOU? Is there another best way to day trade forex pairs that you consider when selecting the best pairs in forex? Let us know down below in the comments section! Winners Edge Trading was founded in and is working to create the most current and useful Forex information and training available on the internet.

Latest posts by admin see all. Now Take your best way to day trade forex pairs to the next level by taking our trading quiz to pinpoint your strengths and weaknesses.

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One of the most important things in trading is picking the right currency pair , combined with the right trading strategy. Choosing correctly has the potential to make a huge profit , while choosing the wrong pair will lose money. Finally, you want to know the average true range of that pair which means how much the pair moves on a day-to-day basis. This article will explain in detail how to choose the perfect pair to trade for your specific trading style and strategy.

The first thing you must do when choosing which pair to trade is to identify the trend. You can identify trends either by using trend lines or by applying moving averages MA to your charts. If the pair has not been trending, it will be important to take note of the sideways trend before you decide which pair to trade.

The next step to finding the right pair to trade is to make sure that those pairs fit the strategy you intend to trade. If you try to trade a trending strategy on a pair that is sideways, you will have a losing strategy. If you have a trending strategy and you identify pairs that are trending, your chance of being a profitable trader goes up a great deal.

Additionally, if you find a pair that has been moving sideways for a period of time it will be important that you choose a range trading or sideways market trading strategy to match up with those pairs.

Many traders make the mistake of matching up the right pair to the wrong strategy. This is important when determining the pairs you want to trade based on your strategy and trading objectives. Most traders overlook carefully selecting the currency pair….

There are three main things to consider when choosing your pair in the Forex market. First, identify whether the pair is a trending or non-trending pair.

Second, figure out what type of strategy you will be trading. Identify the Trend The first thing you must do when choosing which pair to trade is to identify the trend. Pairing your Trend with the Trading Strategy The next step to finding the right pair to trade is to make sure that those pairs fit the strategy you intend to trade.

Casey Stubbs is the founder of Winners Edge Trading, which is one of the most widely read forex sites on the web. Winners Edge Trading has trained thousands of people to trade the Forex markets. Latest posts by casey see all. Now Take your trading to the next level by taking our trading quiz to pinpoint your strengths and weaknesses.