Which currencies can I trade?

Forex Signals is the most widely traded market in the world, with more than $5.3 trillion* being bought and sold every single day. Traders will speculate on the future direction of currencies by taking either a long or short position, depending on whether you think the currency’s value will go up or down.

Typically referred to as “The Majors”, these seven currency pairs make up almost 80% of total daily trading volume*. As you’ll see in the table below, the major currency pairs all include the U.S. Dollar (USD).

Major Currency Pairs

DESCRIPTION SYMBOL NICKNAME
Euro/U.S. Dollar EUR/USD Euro
Great British Pound/US Dollar GBP/USD CABLE
U.S. Dollar/Japanese Yen USD/JPY YEN
U.S. Dollar/Swiss Franc USD/CHF SWISSY
U.S. Dollar/Canadian Dollar USD/CAD LOONIE
Australian Dollar/U.S. Dollar AUD/USD AUSSIE
New Zealand Dollar/U.S. Dollar NZD/USD KIWI

Minor Currency Pairs

While the major currency pairs make up the majority of the market, you shouldn’t ignore the minors – also referred to as Cross Currency Pairs. The minor currency pairs account for all the other combination of major markets such as; EUR/GBP, EUR/CHF and GBP/JPY.

With so many options available, you’re probably asking yourself – which currencies should I trade? A good rule of thumb for traders new to the market is to focus on one or two currency pairs.

Generally, traders will choose to trade the EUR/USD or USD/JPY because there is so much information and resources available about the underlying economies. Not surprisingly, these two pairs make up much of global daily volume.

Which currencies can I trade?

5 Common Forex Trading Mistakes

Trading forex can be a rewarding and exciting challenge, but it can also be discouraging if you are not careful. Whether you’re new to forex trading or an experienced veteran, avoiding these trading mistakes can help keep your trades on the right track.

1. Not Doing Your Homework

Currency pairs are closely linked to national economies and are affected by many factors. They are also traded 24/5, meaning there is usually something going on that will move the markets.

The Most Traded Currency Pairs

Before entering a trade, make sure you do your homework. Not only should you be aware of upcoming events that could affect your trade, but you also need to forecast which way these events could swing the markets. Pay attention to what your technical indicators are telling you and how they compare to your fundamental event analysis.

2. Risking More than You Can Afford

One common mistake new traders make is misunderstanding how leverage works. Familiarize yourself with margin and leverage to help avoid accidentally putting more capital at risk than you had planned.

Many traders find it helpful to set a maximum percentage of their capital that they are willing to risk at one time, usually 1% to 3%. For example, if you have $50,000 of equity and are willing to risk 2% maximum, you would not tie up more than $1,000 at one time. It is important that you stick to that maximum once you set it. currency pairs

3. Trading without a Net

You cannot watch the forex markets 24 hours a day. Stop and limit orders help you get in and out of the market at predetermined prices. This not only allows the trading platform to execute trades when you are not available, but it also makes you think through to the end of your trade and set exit strategies before you’re actually in the trade and your emotions get the best of you. Placing contingent orders may not necessarily limit your risk for losses. forex trading plan

4. Overreacting

A loss never feels good. It can make you emotional and irrational, tempting you to make kneejerk follow-up trades that are outside your trading plan.

Creating a Trading Plan

No trader makes a great trade every time. Accept that losses are part of the reality of trading and stick to your plan. In the long run, your trading plan should compensate for that loss; if not, review your plan and adjust. The Best Forex Signals

5. Trading from Scratch

Using your hard-earned capital to test a new trading plan is almost as risky as trading without a plan at all. Before you start trading real money, open a forex practice account and use virtual funds to try out trading plans and get a feel for the trading platform you are using. Although you will not be affected by your emotions the same way you will be when trading your own money, this is also a chance to see how you react to trades not going your way and learn from your mistakes without the risk. Forex Strategies Articles

Which currencies can I trade?

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Which currencies can I trade?