Article: What are the most common currency pairs traded in the forex market?

Beginner Questions
1

Here’s one!!!

Now THIS makes sense to me i.e. just ONE of my ‘forex issues’ is this thing of ONLY trading the ‘majors’ and I’ve always thought that this limits a (forex) trader (my opinion of course i.e. as most of you know I like to use the ‘shotgun approach’ on equities and commodities. In other words: if there’s a signal ANYWHERE then TAKE IT except that with equities and commodities there are literally THOUSANDS of things to trade)!!!

What are the most common currency pairs traded in forex market?

The only thing you need to watch out for here are the correlations between the pairs i.e. you need to be careful that you don’t inadvertently create an ‘artifical hedge’ so that you land up in trades that don’t go anywhere (as one goes up the other goes down and they effectively cancel each other out). But at least looking for trades on all of THESE pairs should provide you with more opportunities. In addition: there is no question that some of the ‘not so major’ pairs trend WAY better than some of the ‘majors’ (EUR/CAD is a good example and EUR/CHF is another) although you may have to wait a bit longer for your profits i.e. the volatility (Average True Range???) of some of these pairs is quite low and can stay that way for extended period of time (EUR/CAD and EUR/CAD AGAIN being a good examples).

Regards,

Dale.

2

something else to bare in mind
The pip value for eurgbp is almost double that of eurusd.

Dale

So you switched back to trading equities?

Is there a reason why you dropped trading forex assuming you did, if you could possibly go through that, reasons that made you drop it, things you now see in hindsight, it could actually be a helpful read for many people.

3

Hello,

Nice to ‘hear’ from you again.

Yep: you got it i.e. no forex for me (not for a good while now).

There are numerous reasons but I guess the main reasons are these (in no particular order):

All of the trading systems that I’ve tested and traded over the years, which were developed by the ‘gurus’, were developed for equities and commodities trading. Very few of these ‘famous’ authors traded forex (and if they DID trade forex it was forex futures that they were trading). I believe that equities and commodities definitely do ‘behave’ differently i.e. in my opinion they ‘follow the techincal rules’ WAY better than forex pairs (although I must note here that I’m probably one of the last people that is still of this opinion).

One of my BIGGEST issues with forex has ALWAYS been (I’ve noted this before) the fact that there are as many daily closing prices as there are different timezones in the world. To me: all this means is that your daily close has very little to NO meaning. I’ve done this experiment before i.e. take charts from a few brokers in different timezones and you’ll see what I mean. I’ve always wondered how chart patterns or candlestick patters could have ANY meaning on forex given this issue of mine. A pattern may be obvious on the daily chart of a particular forex pair at a broker in New York while that same pattern may be non-existent on the daily chart of the same forex pair at a broker in, say, the UK. And yes: I believe that it’s the New York banking close (one hour after the NYSE closes if I’m not mistaken) that’s SUPPOSED to be used when determining the closing price for a forex pair but I’ve YET to see convincing consensus on this. Of course: one must take into account here that the daily closing price is all important to the trading systems that I note above. Also: I only trade the daily timeframe. In other words: if you’re trading on the hourly or shorter timeframes then this issue is THEORETICALLY no longer an issue i.e. on the hourly or shorter timeframes your closing price should be identical no matter where in the world you are. That said: I honestly do believe that a daily close is WAY more important in the bigger scheme of things that the hourly close (and so on and so forth). An example I’ve used in the past many times: nobody cared where the Dow closes at 10h00, 13h00, or 14h30 but they most certainly DO care where the Dow closes THE DAY i.e. at the end of the NYSE session.

I don’t know if this is an ADDITONAL reason to the above or simply part of the above reason but I like the fact that equities and commodities have rigid opening and closing times. This means that everybody and anybody looking at the charts of a particular instrument is seeing the exact same thing. So to me: when buying or selling starts then everyone is seeing the same movement and I’m of the opinion that this leads to accurate momentum readings.

Because of the above: you have PROPER TRADEABLE gaps. The only time you get gaps in the forex market is on a Sunday night and just how much they mean I know not. An opening gap in equities may have MUCH meaning. As a matter of fact: in some circles the opening gap is the highest probability trade of the day.

With equities and commodities (depending on your broker of course): you have correct and meaningful volume readings for the instrument being traded. With spot forex: volume REALLY means nothing more than what is being reported by your broker i.e. it’s really nothing more than the volume being traded at your broker. This is meaningless so far as I’m concerned.

With equities and commodities: there is just so much information available to you ‘at your fingertips’. Weather Reports, Company Financial Statements, the list in endless. Yes: if you do not trade fundamentally (which I don’t) then these are not quite that important but ‘nice to know’ type of thing. They are, however, available to you if required. In other words: there is FACTUAL information available to you. In my opinion: the closest you’re going to come to anything like this with forex is some or the other analysts OPINION and this is not factual.

I believe that the stock markets move forex pairs. NOT the other way around. Note EUR/JPY as a good example (and there are others). When the major indices go up: those pairs follow. Not the other way around.

Edit: WOW I nearly forgot an IMPORTANT one here!!! LOL!!! MARKET DEPTH!!! You know: Level 2 and Level 3??? ONE DAY ‘when I’m big’ (I don’t have this information available to me now) I’ll be able to see the REAL market depth. There is no way of seeing the ENTIRE forex market depth i.e. at best (if your broker provides it) you’re only seeing what your brokers other clients are doing (and let’s face it: we’re ALL MOSTLY WRONG)!!! LOL!!! What I’m saying is that you can see IN REALTIME if, say, a big financial institution is starting to buy something ‘in bulk’ WHILE it’s happening and not AFTER the fact as is the case with forex news reports.

So those (above) are let’s say my ‘technical’ reasons.

Some PERSONAL notes:

As you know I’ve incurred rather HUGE losses over the years. I’ve gone through those statements MANY times. Overall I’m ‘up’ on all equities and commodities trades and WAY ‘down’ on all forex trades. In other words: if I could eliminate my forex losses I’d be ‘up’ OVERALL. That MUST mean SOMETHING i.e. given the same trading systems and the same person trading them why is there this ‘trend’ (no pun intended). I’ve wondered to myself whether or not it’s just a ‘state of mind’ for me but that doesn’t explain why the same rules, applied to both forex and then to equities and commodities, do not yield the same results.

Although leverage is no longer an issue with me (because I understand it now): I personally don’t like this business of 200:1 and WAY higher leverage. It’s really just a way to encourage traders to overtrade. WHY I cannot tell you i.e. I now know that it’s NOT in ANY broker’s interest for a trader to lose their account and if this is what their intention is then it’s really shortsighted. Once that money is gone (assuming that the broker is ‘taking the other side of your trade’) then that’s it. No more money is going to come from that trader. Most people are not as obsessive as I was (or stupid???) in that they would not have continued to fund account after account after account until they ‘got it right’. If a broker is happy for the trader to lose their account then they’re ensuring that they can never stop trying to solicit new accounts in the hope that each and every single trader loses their account. That sounds like a LOT of hard an endless work to me. I have digressed. The point is that you do not get 200:1 leverage on equities and commodities. Hell: you’re lucky to get 50:1. That said though: if you understand leverage then it really doesn’t make that much of a difference.

I like the fact that equities and commodities are regulated (although let’s face it this REALLY has not been of much help in recent years)!!! LOL!!! But I guess it gives one (me anyway) a CERTAIN sense of (false???) security!!! LOL!!!

If there is a spike in price I have MANY ways of verifying whether it was a ‘bad tick’ or an actual trade WITHOUT having to rely SOLELY on brokers charts and the brokers KNOW this!!!

Even although I’d NEVER EVER again base any trade decision on what I’ve heard on Bloomberg: I nevertheless enjoy watching while trading. It makes me sort of ‘feel’ a part of the business as it were (and of course there’s Margaret Brennan …)!!! LOL!!! But it’s nice. You know: you can sit and watch the trading floors and announcements and then see the reaction on your charts (although I guess this is not that much different to trading forex news).

Another REALLY nice thing is that (unless you’re trading futures): you really have ‘set working times’. My ‘working day’ starts when I wake up which luckily is an hour or two before the LSE opens and finishes when the NYSE closes. I can go to bed in the knowledge that I don’t have to worry what happens overnight. When I started out and was trading forex pairs: my days and nights became ‘one’ and everything was just a blur for a year or two (or three).

THIS one is going to get me ‘shot at point blank range’ (I think) BUT: NAME me a FAMOUS FOREX TRADER??? George Soros??? That’s the only one that comes to mind and REALLY he is famous ONLY because of what he managed to do the British Pound back when??? Name me some famours STOCK or COMMODITIES traders??? I’ll bet you can do it without even searching on the Internet!!!

And then again I guess: I’ve always had a ‘thing’ for the Dow, the S&P, and the NASDAQ!!! I don’t know. Call it excitement when they move, the ‘pizazz’, I don’t know.

In closing: I’ll trade a forex pair NOW AND THEN but I’ll tell you that here now has to be a GOOD reason e.g. something that has been trending in one direction or the other for an absolute AGE and I then get a signal of a POSSIBLE and imminent reversal. EUR/CAD, EUR/AUD, EUR/CHF of late??? That type of thing. But it’s probably more ‘messing around’ than being serious about it.

I could PROBABLY write about this issue for the rest of the day but I wont bore you with more!!! LOL!!! If there is some IMPORTANT reason that I’ve missed I’ll add it!!!

Oh and I had BETTER just add this:

I am NOT ‘knocking’ ANYBODY that trades forex pairs!!! If ‘that’s your thing’ and it works for YOU then ‘good on you’. As noted: forex has only ever cost me money and I’ve given you the reasons why I believe that this has been the case is all.

And before anybody asks me why I’m still hanging around here!!! I started here and I’ll probably end here. There’s a great bunch of people on this site and it’s different from other sites in that there are no ‘know it alls’ around here. In addition: the same principles apply whether you’re trading EUR/USD, Citigroup, Sugar, or Pork Bellies e.g. RISK MANAGEMENT!!! So: as long as I’m still around and can help others to NOT ‘lost their shirt’ then I’ll do so. ALTHOUGH LET ME ADD that I’D STILL LOVE to see a forum HERE dedicated to equities and commodities trading where we could discuss certain fundamentals, trading systems, ideas, soybean yield, the expected weather in India next week, that kind of thing!!! LOL!!!

Regards,

Dale.

Edit:

Speaking of equities and the information that is ‘at your fingertips’ how’s THIS:

‘Foxconn (Apple’s supplier in China) latest attempt to stop suicides: installing antijumping nets’ (a ‘tweet’ from Margaret, Bloomberg, a few minutes ago). You SURE don’t get forex news like this!!! LOL!!!

4

Greate to hear from you too.

You make some very good points.

Sounds like a hell of a journey.

The leverage thing i think falsy lures a lot of new traders who are led into believing they can make big returns with little capital. But as you say a lot of retail brokers treat their customers the same way highstreet stores treate theirs, in and out of revolving doors, they know most are not educated for this business they have stats up to the hill they can tell who is going to be around for a long time and who will be gone within a month just by analysing the way they trade.

I’m glad your involved with something in trading that works for you, it can be like a living nightmare when its the opposite, and a real pleasure when you are making a good income.

The closing time, i believe most charting packages close @ New York time, GMT +1. But I can see how a fixed open and close time can actually be an advantage, you dont need to worry about who is doing what while your sleeping - assuming you have open positions.

That leads me onto the 2nd reason i think lures traders to Forex the fact it is 24 hours, if your lucky to be in a nice part of the World you can go to work and then be home in time for the London or London / NY session.

N

5

Hello,

Yep: agreed about the leverage. AND about the 24/5 thing. BOTH are recipes for disaster in and of themselves!!! I cannot tell you how many times I made PURE MISTAKES simply because I was so darn tired I could no longer think nor see straight. And as I was just saying on another thread: there are just some ‘oh so simple rules’ that need to be followed and I believe that MOST people will ‘make it’ in this business. It’s just unfortunate that we’re all human!!! LOL!!!

Regards,

Dale.

6

Hello, Dale

Can’t resist jumping into this discussion with some information I think you will find useful.

Regarding opening/closing times:

[B]The forex trading day begins at the stroke of midnight at Castle Dracula in Transylvania.[/B]

[B]And, yes, midnight in Transylvania happens to be [B]5pm in New York[/B].

But, it’s Dracula — not the New York bankers —
who determines the start of the forex trading day.[/B]

I hope this useful info puts your mind at ease about when the forex trading day begins and ends.

.

7

Hello,

LOL!!! That’s too funny!!! I WAS RIGHT then though i.e. 1 hour after the NYSE closes which would make it 5:00pm New York Time!!!

NOW I’ll never forget it though!!! Thanks!!! LOL!!!

Regards,

Dale.

9

I don’t mean this comment to come across as insulting or offensive, so please don’t take it as such.
I’ve only read this one post, but from what you’ve covered here it’s blindingly clear that you really don’t know how or why this market operates or functions do you.

Why would you trade a market or group of instruments with live funds that you hadn’t researched adequately or weren’t completely comfortable with?

10

Ahem…

Before I continue: let me just note that n_aftab suggested I detail the reasons for my no longer trading forex pairs as it may be helpful to others. The purpose of my reply was not to start the forex vs equities argument. I know what works for ME and what I’m comfortable with now. If forex is yout ‘thing’ AND it’s working for YOU then I myself could not be happier for you.

Hey Matt,

Nice to hear from you too.

Thanks for the input (and the 20 minutes)!!! LOL!!!

Well: you’re probably RIGHT in saying that trading forex is more challenging. I know: it ‘challenged’ me and my finances for a GOOD long while!!! LOL!!! Unfortuantely: I’ve had to make a choice as to whether or not I want to be challenged or make money!!! I’ll give you a guess as to my decision!!! LOL!!!

metrix:

No offense taken (although I would suggest that before making a comment or judgment such as that about a person: that you read some more of their posts i.e. some people are not going to be quite as understanding as I)!!!

I’ll tell you this though: I eventually reached the point where I stopped CARING WHY the markets move. Just as long as they DO move is all that counts to me.

Why would you trade a market or group of instruments with live funds that you hadn’t researched adequately or weren’t completely comfortable with?

Why??? Because I like most other people were ‘drawn in’ by the ‘hype’ of trading forex i.e. high leverage (and therefore minumum capital requirement), the ‘promise’ of HUGE gains in a very short period of time, the list goes on and on and on. In my opinion: it’s all ‘BS’ and some of the ‘advertising campaigns’ employed by some brokers is just shy of ‘criminal’ in my opinion.

Not to start an argument MYSELF: do pray tell exactly what you can ‘adequately research’ about the Euro (for example) TODAY??? I can, however, give you any amount of ‘adequate research’ about Soybeans (for example) TODAY.

Just curious.

Regards,

Dale.

11

Yeah, it’s “blindingly clear” that you need to read more, and talk less.

You’ve been a member of this forum for what? — three whole days?

And you waltz in here like some sort of expert, and use your very first or second post to start telling everyone what’s what.

Give me a f*cking break!!!

12

How many posts do you suppose it requires one reads before arriving at the conclusions I made then?
You don’t think that one was sufficient enough to expose those facts?

But just to ensure I hadn’t totally gotten the wrong end of the stick, I took your advice. :slight_smile:

Well you certainly have regards the FX one anyhow.

Yet it took you five years & whole bunch of other folks money for the penny to drop that maybe FX wasn’t floating your boat?

It wouldn’t have anything to do with your apparent cavalier attitude towards risk management or [B]lack of familiarity[/B] with your market then.

And folks wonder why FX gets such a bad press out there.
I think I’ll stand by the comments in my original post.

13

Alright: before this turns into ‘one of those’ threads!!!

Clint: I appreciate it. I really do. Thank you.

metrix:

To be clear here: it didn’t take five years it took three years which, I NOW know, was WAY too soon to begin trading ‘other peoples money’ in addition to my own (for what it’s worth: I lost WAY more than they did although that’s no justification for my actions at the time). That being said: the only reason I decided to do it was because for a consistent six months, in the third year, I had made a 2 142% gain on my OWN money for that period (and that’s not a typo) trading, yes, forex pairs only. But then. as the proverbial saying goes, ‘the wheels fell off’, MAINLY because by that stage I thought I’d ‘cracked it’. Having all these additional funds gave me a ‘false sense of security’ and somehow it encouraged me to take far bigger risks than I was ALREADY taking with the thought process being that I now had enough ‘spare’ so if I DID make a ‘just a few mistakes’ I’d be able to recover. Obviously I was wrong and, well, the rest is history. I know NOW that the 2 142% gain was more ‘luck’ than anything else and obviously it was just a matter of time until my NO risk management caught up with me. Which it did: with a vengeance.

So there’s a bit of history for you for what it’s worth. And I’ll agree with you: it’s because of things like this happening that has given this entire business a bad name. No question about it. And believe me: I live with the ‘guilt’ every hour of every day and I SPEND every hour of every day trying to ‘make good’ to those people (and myself) and I do know that eventually this will happen (as long as I stick to trading equities and commodities that is)!!! LOL!!!

The above being said though (which is more personal than anything else): maybe it’s just the WAY that you made your point that DID ‘get under my skin’ (although I did my best to ‘cover it up’ of course). Let me say this: whether I DO or DO NOT understand WHAT and WHY the markets move is immaterial in my opinion. I do not, never have, and never will trade fundamentally. Therefore: the ‘what and why’ are immaterial in my opinion. I trade various trading systems and when I get signals I take them. I have proved, beyond ANY doubt, that these same trading systems DO NOT work on forex pairs and I believe that I know the reasons for this (as detailed in my LONG post above). Could it be that after my SPECTACULAR wipeout that the ‘shock’ made me sit back and look at equities and commodities instead??? Possibly although EVEN in the past two years: just about EVERY SINGLE TIME I get ‘brave’ and take a signal on a forex pair the trade has gone ‘pearshaped’. Same trading systems, and same trader with the same hard lessons having been learned: different result on equities and commodities. For this I have NO explanation and it only serves to reinforce my opinion that there IS a difference between the way that forex pairs and equities and commodities ‘move’ because all the other factors in the equation are ‘static’.

Anyway (now that my ‘dirty washing’ has again had to be aired): I believe that I have made some good points as to the difference between trading forex pairs and trading equities and commodities. It works for me and that’s all that counts to me (and my clients). I could be WAY wrong. I hope I am because I can tell you that there are WAY more retail forex traders than there are retail equities and commodities traders (good point actually i.e. this is just an OPINION but I wonder if there are any statistics available) which means that if I’m RIGHT there are WAY more people that are going to end up the same way as me for very much the same reasons.

So I hope that clears things up between all of us!!!

Now one thing I’d like to ADD here (as part of my LONG post above): many people say that indicators are useless. I have a theory for this (that only ocurred to me this morning while looking at my positions). As forex is a 24/5 ‘game’: remember that the indicators are still ‘ticking over’ even when there is little or NO trading activity (mainly between session times). In other words: on an hourly chart for example your indicators are still ‘ticking over’ during those periods which just HAS to be meaningless. With (exchange traded) equities and commodities: your indicators are only ‘ticking over’ when there is REAL and ACTUAL trading going on. This is why, for example, RSI is WAY more reliable when used with equities and commodities. In other words: RSI values are only being updated when there IS INDEED TRADING going on.

Anyway: as I did note before the only reason that my LONG post (above) was posted is because somebody asked me to post about my experiences and the reasons why I have my very serious doubts as to how anyone can make money in the long run trading forex other than the banks. I simply answered n_aftab and gave my reasons. In no way is my post intended to ‘pit’ forex traders against equities and commodities traders. At the end of the day: it’s the money that counts and nothing else. I’ll tell you: for those first three years I was more in ‘love’ with the business of trading (trading ANYTHING) than with the money that was to be made. My ‘wipeout’ humbled me somewhat and made me realise that it’s a business just like anything else and it should NOT be an obsession.

No matter WHAT you trade: I wish you well!!!

Regards,

Dale.

14

He he he, oh man are you a Cheyenne dog soldier by any chance?

I mean you got to be, or certainly their equivalent if you’re going to gallop solo into a camp kicking up the dust & dirt while it’s inhabited by more than one badge wearing marshal.

Here, grab my arm, haul yourself up & lets get you out from here before old Wyatt Earp (the one with the big shiny 4k post star) turns up with his bible, big bold type & reinforcements.

16

Oh that’s WAY too funny!!! LOL!!!

But hey: metrix is probably right!!! Nobody can ‘knock’ that. I actually agree: who in their RIGHT MIND would start trading instruments live that they had not ‘researched adequately or weren’t completely comfortable with?’ The very SAD answer to this is ME (to begin with) and in all probability a few thousand more people will start doing this very thing TODAY (and tomorrow, and the day after, and next year, and next millenium)!!! And I guess that the best that I (we) can do is make them aware of their choices and the pitfalls!!! And that I guess is the main purpose of these forums (and it’s why I continue to post).

Regards,

Dale.

17

Hey Matt,

Well maybe THAT is why equities and commodities ‘work’ for me i.e. APPARANTELY I have that ‘gangster mentality’!!! LOL!!!

I love you guys!!! If the S&P doesn’t ‘put a smile on my dial’ then I know I can count on the forum members!!! LOL!!!

Regards,

Dale.

19

LOL!!!

As if THAT is not enough: somebody told me the other day that I look like a ‘Mafioso’ in that picture that I posted on the ‘pictures thread’ (or whatever it’s called)!!! LOL!!!

Anyway: to back up my NEW theory about indicators not working correctly on forex pairs I’ve attached a chart demonstrating what I mean. It’s an hourly chart of the US Dollar Index Futures (but the same applies to forex because this is also traded 24/5).

Basically: for a good few hours there has not REALLY been any SERIOUS trading right??? And yet: MACD (as an example) continues to ‘tick over’. (I’m using MACD as an example because out of sheer boredom I’m trying out that new MACD interpretation as detailed on another message thread). Now if I look at the VIX for example: MACD stopped ‘ticking over’ when the NYSE closed and will only START to ‘tick over’ when the NYSE opens again (and of course the same would apply to equities and commodities).

Just something to back up my observation is all.

Regards,

Dale.

dx0910 05082010 10h43.PNG685×601 11.2 KB

20

:slight_smile: haha, funny.
Thanks for your offer but I’m pretty confident I won’t need a juicy steak for my eyes today.

I guess the fx-honorary member badge you’re referring to doesn’t necessarily reflect any kind of acquired trading expertise then.

21

Hello, me again.

Well here’s an idea: why don’t you tell us something about yourself metrix. Seriously. Judging by your observations: I’m sure you have something valuable to contribute and I’ve no problem taking criticism or learning new and possibly quite valuable lessons. Hell: for all I know you could be somebody that’s traded forex for years and has made a veritable ‘killing’ from it. The only reason for the (apparant) animosity is because nobody ‘knows’ you yet I guess.

Regards,

Dale.

22

Correct cowboy.
That particular badge is handed out only when you’ve clocked up 1,000 posts on here. It doesn’t discriminate between traders & tire kickers.

Wyatt issues you with your badge at a public ceremony in the town square complete with trumpet fanfare.
A couple old ladies toss shiny ticker tape at you from the balcony above, (which generally misses) & he mentions you in dispatches via big, bold black type every time you post, the point of which I’ve never really fathomed?!
I put it down to some sort of law enforcement tradition.

Just don’t stand too close to those damned trumpets or keep a loose rein on your pony when it happens, they’ll give you earache for half a week + it’ll spook your pony so hard he’ll kick off through the town boundary & gallop till he drops.

Mighty inconvenient.

24

Oh well: I guess ‘that’s that’ then.

Back to ‘ye olde’ (boring) Sugar trade then!!! LOL!!!

Regards,

Dale.