The currency market is where you are able to make millions, by investing a portion of the capital needed and using leverage power at the same time. Forex manifests high levels of liquidity due to the enormous size of the total volume of transactions on a daily basis. Widely speaking, forex pairs belong in three different groups. These are the major pairs, the commodity currencies and the cross currencies. Let’s dive in each group. Major currencies are the pairs which are traded the most; they contain USD as a base or quoted pair. Commodity currencies are the ones which have a relatively close value to a commodity such as crude oil, coal, iron ore. Cross currencies include all pairs which do not contain US dollars. The top best cross currencies are EUR/GBP and EUR/JPY.
Majors currency pairs: EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD, NZD/USD.
Commodity currency pairs: EUR/GBP, EUR/AUD, GBP/JPY, CHF/JPY, NZD/JPY, GBP/CAD.
Cross currency pairs: EUR/TRY, USD/HKD, JPY/NOK, NZD/SGD, GBP/ZAR, AUD/MXN.
Why trading Forex?
Forex Trading has experienced a growth in popularity in the last 10 years. It became popular because of many advantages, like availability, being profitable in both directions, liquidity, leverage availability, and international market exposure.
Market Availability– Forex is available 24 hours during 5 business days. This way, you can trade major, minor and exotic currencies any time. Since availability is during all the day, and not in particular hours, it means that sudden events can happen anytime during business days.
Make profits in both directions– In Forex there are excellent opportunities to generate profits. If you believe that the price will go up, buy it and sell later when the price has already gone up. If you believe that the price will fall, sell it so your currency will not be devalued.
You can trade currencies anytime using leverages available if you want to boost your trading presence. We are providing 3 different leverages, 1:100, 1:200 and 1:300. Leverage comes with power and risk also, so be careful how you use it. Forex has a high level of liquidity, because of the large number of daily volume transactions.
Which pairs should I trade?
What pair to trade depends on your experience in trading online. If you are a beginner in financial markets and do not know all the tricks of Forex trading, you better stick with major and minor pairs. Exotic pairs are less suitable to work with because of the low rates of liquidity and higher spreads. Saying that, you will make money with exotic pairs when you know trading in deeper levels of complexity.
According to our statistics, our traders are the most successful in EUR/USD trading, with an average of 44% successful trades. Second comes GBP/USD with 32%, USD/JPY with 12%, USD/CAD with 7% and USD/CHF with 5%. We are very proud as we see that these numbers are growing in a very stable trend.
The EUR/USD is the ticker for the euro – dollar currency pair. It represents one of the majors in Forex and since it shows the world’s largest economies and trading amounts, it has the highest levels of liquidity. It is, in fact, the most liquid pair and offers low spreads to traders who want to choose it as their main trading asset.
The logic of the pair is the same as for the other pairs, it shows how much of the second currency it is needed in order to buy one unit of the main currency. When it is said that the currency is getting stronger, it means that you need to pay more US dollars in order to buy one euro and when the price of the EUR/USD is falling, it means that the value of the euro is declining relative to the US dollar.
The EUR/USD is nowadays the most popular currency pair but just for you to know, it wasn’t around 20 years ago. The pair came in light on 1st January 1999, when the euro was announced and 19 of European countries adapted it. The first value of the pair was 1.1795 and fell to 0.8225 in October 2000. It started to go up again while the adoption of the euro became widespread and went to 1.6037 in July 2008 during the financial crisis.
In the financial world, the EUR/USD is named as ‘Fiber’. Meanwhile GBP/USD is named ‘Cable’. As the euro is much newer, traders decided to make an ‘improvement’ to the ancient US-UK telecommunications cable, to a much newer ‘Fiber’ cable.