Best forex brokers|What is a currency pair in forex trading?

Best forex brokers | WHAT IS A CURRENCY PAIR IN FOREX TRADING?

Almost all traders choose currency pairs to trade in the forex market. They are the most common and easiest instrument to trade.

Data show that over 90% of forex traders choose currency trading. So what is a currency pair?

Why is it so popular? And what are the most common pairs? All your questions will be answered in this article.

Best forex brokers | WHAT IS A CURRENCY PAIR?

In forex trading, when you buy a country’s currency with another currency, you are trading currency pair. Let’s take the pair EUR/USD as an example.

When you say you are trading the EUR/USD pair, you are buying Euro with US dollar.

Every currency pair consists of two parts: the Base currency and the Quote currency, respectively.

You pay for Base currency with Quote currency. A currency pair can be written as either EUR/USD or EURUSD.

There are 8 most common currencies in the forex market, which are:

USD from the America, the Euro in Europe (EUR), the British pound (GBP), the CAD from Canada, the franc of Switzerland (CHF), Australian dollar (AUD), the New Zealand dollar, and the Yen from Japan.

They are chosen either for the Base or the Quote currency the most.

Best forex brokers | THE USD

The USD is the number one choice of traders all over the world. It is easy to understand because the US financial market is the biggest market in the world.

Now let’s check out the 5 most common currency pairs that contain the USD:

  • USD/JPY. The base currency is USD and the quote currency is JPY.
  • USD/GBP. The base currency is USD and the quote currency is GBP. Sometimes this pair is called the pound-dollar.
  • USD/CHF. The base currency is USD and the quote currency is CHF. People call this the dollar swissy pair.
  • USD/CAD. The base currency is USD and the quote currency is CAD. Sometimes it is called the dollar-loonie.
  • AUD/USD. The base currency is USD and the quote currency is AUD. Traders refer to this pair as the Aussie dollar.

Besides the USD, the most common currency pair chosen by traders all over the world is the EUR/JPY.

Best forex brokers | 10 MOST COMMON CURRENCY PAIRS

According to the data of trading volume, these are the 10 currency pairs that most traded by forex traders everywhere.

They are stable, easy to find information and analyse:

  1. USDCAD
  2. EURUSD
  3. USDCHF
  4. GBPUSD
  5. NZDUSD
  6. AUDUSD
  7. USDJPY
  8. EURCAD
  9. EURAUD
  10. EURJPY

CONCLUSION

Choosing a common currency pair is good for your trading, because they are not very volatile and safe.

Moreover, many people trade them, so it’s easier to find someone who also trade those pairs to help you.

Now you know what currency pairs in forex trading means. Let’s start trading today.

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