How to choose Currency Pairs

[Wentworth]

I'm trying to decide which currency pair to trade in. I've been advised to concentrate on one pairing for the time being, getting to know all I can about it. I believe that there are certain factors to be taken into account eg.

Trading Hours - When is the best time to trade certain pairings and when are the relevant markets open.

Times of Report Releases.

Think about some of the less volatile ones eg Eur/USD + Eur/GBP

I am British but live in Thailand (GMT +7) and am aiming to trade during our normal office hours. I have the time to use my practice account pretty much as a day job; so will pretty much be treating it as the usual office job. As far as I can see it's really a choice of New York, London and Tokyo; with Tokyo seeming to have 'sensible' hours. Does it really matter if I choose a pairing for 2 other countries than my own(GBP), or will the general economic data and other reports give me the info I'm interested in?

Am I thinking along the right lines?

[triphop]

Hi, lots of the right questions there. If Tokyo hours are the most convenient, then that leads you to the yen crosses in the main - unless of course you're looking at swing trading, in which case it wouldn't matter.

I wouldn't be too fussy about choosing a currency that doesn't involve the pound. It is helpful that the media inevitably gives you a bit of background about general economic state of affairs, but you could easily get this online, and the majority of trading decisions will be off your charts anyway.

As for news releases, you can find these easily enough, on this site and many others.

Good luck in your trading.

[daydreamer65]

The three major market centres for Forex are Asia (Tokyo), Europe (London) and North America (New York).

• The Asian market opens at 1:00am GMT (although New Zealand and Australia open about 1 hour earlier).
• At 7:00am GMT, the European market opens.
• London, the most active centre for Forex, opens at 8:00am GMT.
• Finally at 1:00pm GMT, the North American market becomes active.

The most liquidity and turnover occurs when London and New York overlap, which occurs between 1:00pm and 5:00pm GMT. The least liquid period occurs when London finishes and before Asia opens.

I have transcibed the trading hours again for reference purposes,
I have left them in GMT but I am sure you can translate them to your
timezone.

I would say you are probably in the best position to take advantage
of the early moves in the Tokyo market, ie yen crosses, then move
up to the European open, where you will have analysed the markets
to add or monitor a trade from home if needed.

As they say "the world is your oyster", take a look at GBP/JPY,
EUR/JPY, CHF/JPY, if these are too volatile for your trading style
then EUR/GBP, EUR/USD, GBP/USD may interest you more.

Best wishes enjoy the adventure.

[Wentworth]

Many thanks for your help.

I am thinking about perhaps linking something with the JPY, so as to take advantage of Tokyo market hours. For some strange reason I feel that I need to be able to react fairly quickly to report releases. If I chose a European currency, eg Eur or GBP I should have maybe 2 or 3 hours to trade whilst either the London or Euro markets are open, perhaps being able to see their reports. I say this without knowing what times the key reports are released.

[daedalus]

I just initially picked the 8 pairs my broker offered with the lowest spreads... logically those should be the pairs with the most liquidity. Its worked out so far!