The Best Forex Trading Currency Pairs for Beginners 2022Deltafx Admin 21 November 2022
what you read here:
- 1 The difference between the forex market and the stock market
- 2 Introduction of various currency pairs for trading for beginners
- 3 Important tips for trading currency pairs on the forex market that beginners should consider
- 4 Choosing the best currency pair to start trading in the forex market
- 5 Which is the easiest currency pair to trade?
- 6 Other popular and valid currency pairs to trade in 2022 for novice traders
- 7 Conclusion:
Since the purpose of entering the forex market is to make money from this market, if you decide to enter the market as a beginner, you need to learn the basics of this market very well. The first step is to familiarize yourself with currencies and the meaning and concept of currency pairs, and practice different types of trading strategies to improve the quality of transactions and make more profit.
When we talk about buying a currency pair in the foreign exchange market, we mean buying a major currency in exchange for the delivery of another currency. At this point, an offer to buy is made and then, based on this offer, certain amount is paid for receiving a major currency. If you intend to sell, the same thing happens, but in the opposite way. It means an amount is offered for the sale of the major currency, and depending on its value, the desired currency is received.
The difference between the forex market and the stock market
It should be said that the nature and mechanism of the foreign exchange market is different from the stock market. In the stock market you can buy a certain number of shares of a company or a business enterprise by paying a certain amount, but in the foreign exchange market this process is different and you are constantly exchanging currencies with each other.
Introduction of various currency pairs for trading for beginners
To start trading in the forex market, you need to familiarize yourself with various currencies and forex currency pairs so that you can protect your capital and profit from it more easily. In general, there are three categories of currency pairs in the forex market:
- Major pairs
- Cross pairs
- Exotic pairs
Introducing Major Pairs
The first category, known as major currency pairs, are the most common ones in forex exchanges. About 85% of financial transactions in the foreign exchange are conducted through them. This category of currency pairs is recommended for beginners as a point for trading. The important and remarkable thing about this category is that there must always be US dollar in one side of trading. In other words, it can be said that the US dollar is the strongest and most reliable currency among the major currencies. The list below shows the main currency pairs;
Getting to know the Cross Pairs
The second category, known as cross currency pairs or secondary currency pairs, does not exist on any of the sides of the US dollar, but at the same time is counted among the common ones, which is why they can be considered important, as a byproduct of Forex. The largest trading volume of secondary currency pairs includes Euro, British Pound and Japanese Yen on one side of the transaction. Below you can find the important cross currency pairs:
Explanation of the exotic currency pairs
Finally, we come to the exotic currency pairs. This group, as the name suggests, consists of two currencies, with one of the major currencies on one side and the currency of one of the developing countries whose economy is growing on the other. Since these currency pairs are extremely volatile and often subject to sharp fluctuations, inexperienced traders should stay away from them. Here we list some of the most important exotic or unusual currencies;
Important tips for trading currency pairs on the forex market that beginners should consider
When choosing the best currency pair to trade, you should consider the following:
1- It should be among the most important currency pairs, as the transaction volume in this category of currency pairs is high;
2- The number of daily price fluctuations is high. If a currency pair has low fluctuations, this will limit your profit. The higher the volatility of a currency pair, the higher the trading volume and profit.
Choosing the best currency pair to start trading in the forex market
Most traders, regardless of their experience and skill in trading in the forex market, often choose to trade the major currency pairs. The reason is that these currencies belong to countries with very strong economies, which make them strong, stable and valuable. If you are a beginner and decide to enter the forex market and trade currency pairs, it is recommended that you choose one of the major currency pairs. Since these currencies are very popular in market, they have the characteristic of being quickly liquidated, so more than 80% of the exchanges and financial transactions of the foreign exchange market consist of them.
Which is the easiest currency pair to trade?
EUR/USD is not only the easiest, but also the most stable currency pair to trade. This currency pair is the best choice not only for beginners but also for professional traders. This currency pair is one of the most popular ones that has a high transaction in the market very frequently as its exchange costs are lower than other currency pairs.
However, this currency pair has high volatility and it is difficult to predict its movement. Almost all major banks, brokers and other financial institutions use this pair as their main trading instrument, which makes it even more unpredictable. Although EUR/USD is one of the most traded instruments, you can choose from other popular currency pairs that have lower spreads and liquidity.
Other popular and valid currency pairs to trade in 2022 for novice traders
- USD/GBP: this currency pair is very popular among traders as it offers profitable pips, but for beginners trading can be risky. Therefore, if you are new to this currency pair, it is recommended that you monitor your transactions carefully and attentively.
- USD/JPY: This currency pair is known for its low spread and is more predictable than other currencies.
Now, let us sum everything up and identify the most suitable, predictable and best forex currency pairs for beginners trading.
According to what we have mentioned above, it seems that the best currency pairs for trading are:
Among the most important factors you should consider when choosing a currency pair to trade are the volatility of the currency pair, its spread, trading strategy, and the ability to predict the direction of the currency pair.
First of all, try to choose a currency pair where you can easily access resources and relevant materials, and also make sure that the trading time of this currency pair is suitable for your trading periods.
In this article, we have talked about the best currency pairs for beginners. We recommend that you choose one main currency pair and stick with it for a while. When you are sure that you have acquired the necessary skills to trade this currency pair, you might be sure that it is time to expand your trading.