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Selecting a currency pair to tade with......

  • Post #1
  • Quote
  • First Post: Sep 8, 2009 12:30am Sep 8, 2009 12:30am
Hi FF,

I have read many posting of FF stating that we should select the best currency pair to trade with individually.....

Now what i will like to have help on is to know which currency pairs are the best for each individual.....

I personally like to trade GBP/USD, but i find it hard because both of these countries are strong.....

Is it true that we need to select 1 Major country/currency and match it another which is not so strong?

If so, which currency pairs are these?

Does AUD/USD , EUR/AUD , AUD/JPY qualifies to this category?

Lastly, if we talk about AUD, we need to focus on Gold fundamental right?

Please help me with any and all suggestions because i really need to understand in details.....




Cheers
Why not try it on a demo account to see which pair suits you?
  • Post #3
  • Quote
  • Edited 12:57am Feb 4, 2010 12:55am | Edited 12:57am
Each currency has its own personality and you have to try them out to find which ones suit you.

Roughly speaking. EURUSD - highest order flow, usually less volatile than the others, lowest spread. USDJPY, USDCHF - at times, very little action but have solid order flow. AUDUSD, CADUSD - low order flow can cause unexpected reversals. GRPJPY - most volatile, highest spread.

Which only leaves the GBPUSD, which is the best pair for most traders and especially beginners because it has good order flow, strong moves and moderate volatilaty.

Another important consideration is when you can trade during the day. If you can only trade the Asian session, GBPUSD is not a good choice and USDJPY is better.

I have never heard of the concept of one strong vs one weak currency as a trading strategy. Perhaps you should not concern yourself about that until you have more experience and stick with the majors.
Quoting mohamedrizal
Hi FF,

I have read many posting of FF stating that we should select the best currency pair to trade with individually.....

Now what i will like to have help on is to know which currency pairs are the best for each individual.....

I personally like to trade GBP/USD, but i find it hard because both of these countries are strong.....

Is it true that we need to select 1 Major country/currency and match it another which is not so strong?

If so, which currency pairs are these?

Does AUD/USD , EUR/AUD , AUD/JPY qualifies to this category?

Lastly,...
lot more to learn.learn the basic of trading from other forum
or just google for basic
If you are just starting out, I would suggest you to limit yopurself to EUR/USD and GBP/USD as they are the most liquid and have very tight spread.

Also technical analysis work very well on these currency pairs!
Quoting forexmarket
If you are just starting out, I would suggest you to limit yopurself to EUR/USD and GBP/USD as they are the most liquid and have very tight spread.

Also technical analysis work very well on these currency pairs!
Does it? In my view TA is useless it's like driving while looking out of the rear view mirror.
Economists have forecast 9 out of the last 5 recessions
Quoting forexmarket
If you are just starting out, I would suggest you to limit yopurself to EUR/USD and GBP/USD as they are the most liquid and have very tight spread.

Also technical analysis work very well on these currency pairs!

Completely agree if you can trade during the European or US sessions.
Quoting mohamedrizal
Hi FF,

I have read many posting of FF stating that we should select the best currency pair to trade with individually.....

Now what i will like to have help on is to know which currency pairs are the best for each individual.....

I personally like to trade GBP/USD, but i find it hard because both of these countries are strong.....

Is it true that we need to select 1 Major country/currency and match it another which is not so strong?

If so, which currency pairs are these?

Does AUD/USD , EUR/AUD , AUD/JPY qualifies to this category?

Lastly,...
Anybody who tells you there is a best pair is full of shit, there is no such thing as a 'best', markets and edges are tied together, you need to develop the best market/edge combination(s) you can. You can't do one without the other.

E.g.
1. Start with picking some method to try, say breakouts.
2. Test each market/time-frame/breakout parameters combination until you figure out something that works good.
3. Trade very small.
4. Evaluate the results.
5. If it works scale up and keep monitoring, if not, goto 1 with a different idea.

By asking 'which market is best' you are putting the cart before the horse, people by answering your question are pulling the answers out of their ass, because they have no idea how you trade and I suspect that neither do you.
The breaking of a wave cannot explain the whole sea.
Just follow a pair or two until you feel like you get to know how it trades. This could take a year or longer to really get the feel for how it moves. I personally like EURUSD and GBPUSD for their trending nature and cleaner big moves
Quoting markmm
Does it? In my view TA is useless it's like driving while looking out of the rear view mirror.
according to me, Technical analysis may not be appropriate if you are trading on 5 min chart or lets say 10 min chART. But if you are trading on 15 min chart or above, the technica analysis is highly effective.

To give you an example, look at 200 EMA. Almost 80-90% of time it acts as a major support/resistance..
Technical Analysis is based on probabilities based on the historical price patterns. But the whole premise is wrong, price isn't moved by patterns, so over the long run any trading based on TA will revert to 50/50 add the spread and you will lose your account.
Economists have forecast 9 out of the last 5 recessions
Quoting forexmarket
If you are just starting out, I would suggest you to limit yopurself to EUR/USD and GBP/USD as they are the most liquid and have very tight spread. Also technical analysis work very well on these currency pairs!
i have been looking for a pair to concentrate on so thank you for this advice, i am going to solely focus on these two and see which suit me.
My advice is to focus on the most popular currency pairs. EUR/USD, as it is mentioned above, USD/JPY, USD/CAD, GBP/JPY, etc.
Keep in mind that the GBP pairs may surprise you unpleasantly during Brexit news.
actually we the traders choose our trading pair according to our trading understanding , yes major currency always safe and sounds than others, now i am on scalping thats why looking for a most lowest trading spreads which will work permanently.
Quoting NathanAstel
actually we the traders choose our trading pair according to our trading understanding , yes major currency always safe and sounds than others, now i am on scalping thats why looking for a most lowest trading spreads which will work permanently.

Major pairs have low spreads compare to the other. They are best suitable for scalping.
EUR/USD is the best pair to scalp, I think, in that regard, it has the smallest spread.
IMO there is no "best pair to trade" if you want to trade volatility then know the themes in the market and find that pair

so if every 2nd headline is brexit you want volatility trade GBP
if every headline is about china look at AUD especially audjpy

this is where a little fundamental understanding can help and learning how to trade crosses

SO which pair? majors? minors?

for example you may be keeping an eye on central bank speeches and we know RBNZ currently are dovish same as RBA talking about rate cuts...
so for me i have a short bias on aud and nzd now lets say you want to trade the gbp and it drops on negative headlines so you would expect that GBP to move across the board.... However you yourself may believe that all this is back and forth is BS and eventually UK AND EU will do a deal (which i believe they will) so you may decide to think ok maybe instead of trading cable one may look in to buying dips in GPBAUD AND GPBNZD..... So either we we get +ve news in GBP and / or we get some more dovish talk from rba and/or rbnz or in fact a rate cut, which will help the the pair higher..... maybe we don't but its about formulating a plan for me and what makes sense

this is more for med-long term style trading which is what I do

but maybe this helps a little
To select a pair for trading we need to know more about that pair. Every pair has it's unique movement patterns. We can learn that by watching charts regularly. It's a lengthy process.
Quoting HisaoFujioka
To select a pair for trading we need to know more about that pair. Every pair has it's unique movement patterns. We can learn that by watching charts regularly. It's a lengthy process.

Why make it complicated ... keep trading easy

understand How to trade crosses and what are high ATR pairs thats it you don’t need to watch charts regularly

just because something happened in the past does not necessarily mean it will behave the same way in the future
The market is cyclical. If something happened in the past it will very likely happen again in the future.
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