How to Trade the World’s Most Popular Currency Pairs
Forex trading is full of opportunities, and you will only succeed as long as you understand the currency pairs that you are trading. Just getting in to it or taking a look at the funded account forex opportunities, it is important to understand the dynamics of well-known currency pairs. With this guide, you will be able to begin trading forex with a lot of confidence since you will have known the basics of the currency pairs and how to deal with them in a strategic way.
Understanding Currency Pairs in Forex
When dealing in forex trading, there is a trading of currencies in pairs. Every currency pair has a quote currency and a base currency. A price of a currency pair indicates the quantity of quote currency that is required to purchase one unit of base currency. In the case of EUR/USD, EUR is the base currency and USD, the quote currency. When EUR/USD is at 1.1000, it implies that one Euro will equal 1.10 US Dollars. The three major groups of popular currency pairs can be classified as majors, minors or exotics. Majors have the highest volume of traded pairs in the world, including EUR/USD, USD/JPY, GBP/USD and USD/CHF. Less traded pairs are minors, and exotics consist of a major currency against one of an emerging economy. |  |
Why Focus on Popular Currency Pairs?
Major currency pairs are more likely to be liquid and boast of tight spreads, translating to incur singular trading expenses and reduced price distortion. Increased liquidity also leads to an easier movement of prices and facilitation of the trade. These pairs are where new traders/traders who fund accounts have a tendency to begin in order to take advantage of the market depth and stability that they present.
Start Trading Forex: Key Tips
Learn the Market Hours
Forex is a 24 hour market which is subdivided into time zone divided sessions: Sydney, Tokyo, London and New York. Various pairs of currencies are busier at specific times. As an example, we have EUR/USD which is very active during the New York and London sessions.
Apply Technical and Fundamental Analysis.
Technical analysis is the science of price charts and indicators that allow predicting the future. Fundamental analysis takes into account such economic factors as interest rate, economic indicators, and geopolitical factors on currency value. The best way to make you trading decisions is to combine both strategies.
Practice Risk Management
 | Irrespective of the level of expertise, trading is a risk. Investment should always be done with stop-loss orders and to no extent should one risk beyond their ability to lose. Trading using a funded account forex regime is usually accompanied by risk guidelines, follow them to the letter or you may jeopardize your funding. |
Start Small and Scale Up
Trade in smaller sizes especially at the beginning so as to minimise risk. Once you have experience and are certain that you will not lose, you can slowly add position sizes.The Role of Funded Account Forex Programs.
Funded account forex programs provide traders with capital to trade larger amounts than their personal funds allow. These programs usually require traders to pass evaluation tests and adhere to strict risk management rules. Successful navigation of funded accounts demands discipline, solid strategy, and familiarity with popular currency pairs, making education and practice essential.
Conclusion
The idea of trading the most popular currency pairs in the world provides a good way of going on the journey by both the new and experienced traders. Learning to trade currency pairs, paying special attention to highly liquid pairs, and engaging in a disciplined risk management are the secrets of successful trading. Born with your capital or trading on funded account forex schemes, dedication to learning and intelligent plans will make you evolve in the forex market.
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