What are the Top Currency Pairs in 2018 to Trade?
The forex markets are going to see some interesting changes in 2018. Of course, these changes can be both positive and negative depending on how you adapt to them – but if trading 101 has taught you one thing, it’s to stay flexible and get ahead of the game by doing your homework. New regulations are going to hit the forex market in 2018, bringing a slew of changes with them. With recently developed trading regulations, automation, artificial intelligence and blockchain technology coming around to rear their heads, you can expect a lot of changes to the forex market in 2018.
One thing that won’t change however, is the fact that forex is traded on currency pairs. One of the most common question you’ll see on the internet in the context of forex is to figure out what the best forex pair to trade is. In forex trading 101 you might have learned that sticking to the major currencies is the best idea, but that’s far from the truth.
The big currencies you need to be aware of regardless, whether individually or in pairs, are: USD, EUR, AUD, CHF, CAD, JPY and GBP. Those are the big 7 currencies in the market that occupy a majority of all transactions in the forex world.
USD/EUR. This is one pair that you generally can’t go wrong with. It’s the most popular pair in forex trading and the most basic one as it connects the two economic powerhouses of the democratic world to each other. It’s one of the least volatile pairs and has the least risk associated with it. It has a low spread but can still be profited from with decent timing. This is also one of the most well documented pairs online, so finding information to study is easy.
USD/GBP. This pair has recently risen in popularity, especially with the increased volatility after Brexit. The increased volatility has contributed to more pips and higher levels of profitability. It’s generally considered a volatile pair overall, but many traders prefer trading this one due to the profit opportunity as well as plethora of information found on this pair online.
USD/JPY. Another combination of the big 7 currencies that enjoys a large level of popularity online. This one has a low level of spread and generally follows predictable up and down trends, which make it an easy one to trade. There are good opportunities for profit in this pair, especially with the current geopolitical climate.
These are the best and most popular pairs to trade at the beginner level. Should you find yourself looking for something more volatile and perhaps profitable, there are plenty of special pairs you can trade too. Take note that not all brokers support all currency pairs for trading, so first check what possibilities your broker offers in the first place.
If you live outside of Europe and the U.S, you can take advantage of your knowledge of your local currency. By understanding your country’s politics, economy and major events, you can make use of that volatility to profit by trading to one of the stable, big 7 currencies. In most cases, your local currency will be traded against the USD, so keeping an eye on that one is important for profit.
It’s important to do as much research as possible before voyaging into the world of forex trading. Regardless of what country you hail from, it’s always a good idea to first research your local currency and how it’s been performing over the last couple of years, and what factors have been important to consider in its performance. From there, you can make informed decisions and make profits on the forex market.