How to choose the best currency pairs?

[honghg]

Forex market is highly volatile so it is important to focus on right pair. If you are professional trader so fundamental and technical analysis but don’t stick to a particular currency pair. Diversification is essential to generate good returns on investment.

[justshell]

I think it’s good for people that are starting out to focus on like one or two pairs. Why not master one or two pairs, and just open as many positions as you want off of that one pair?

[honghg]

But you need to diversify your portfolio. Market is highly volatile

[justshell]

I get what you’re saying, but I know professional traders that only trade no more than like 3 pairs. You don’t need to trade them all.

[J_C_Anderson]

It is important to decide, would you like to trade or to invest.
If you are an investor, you need to diversify your portfolio and sometimes hedge it, but if you are a trader, especially daytrader - choose the pair suits you the most (volatility, etc.) and find out everything about it.

[mtb_rex]

Other than diversification, how do you identify the “best” pairs? Other than trading one that you’re not already trading, what factors help you decide one over another?

[J_C_Anderson]

Diversification is mostly when you have portfolio and feel comfortable as nearly any event can cause serious problems. So, this mean to trade several pair Together at one time. For example, you open 5 positions (each position has its own point of influence) and wathc them for a week or two.
But you are right, trader should try to trade different pairs to find out which suits him the most.

[birdie23]

I think everyone should choose trading pairs on the basis of what trading strategy he/she is using.

[Redart_trading]

Hi all,

I noticed that GBP/USD is usually much more volatile than others. I am relatively new to Forex, so I was wondering if this is common or it is just true in this period. Thank you!

[Sarah_Lawrence]

The definition of best here could vary according to different traders subject to their level of knowledge, experience, comfort and trading strategies. Most people avoid exotics but for some people it is the “best” pair . It all depends on how well you are trading it profitably.

[Sakhr_Zafir]

As forex is a currency exchange market and traders have different opportunities to trade with currencies a trader should select the best currency pairs. I personally recommend major currency pairs as USD is one of the most common pairs traded.And it is easy to predict the value of major pairs.

[honghg]

Major & cross currency pairs are always better for trading.

But again proper analysis & risk management is require

[dianajs]

I think that how one picks a currency pair depends on a lot of factors. It depends on how much experience the trader has, as newbies, for example, usually prefer the more popular currency pairs; it depends on their strategy, whether it fits a more or less volatile market, whether they’ll keep long or short term positions, and so on.

[tommor]

I never day-trade. All the pairs are good for me…

[frandlost]

@tommor I’m on The daily diet too!

[dianajs]

How do you usually trade?

[tommor]

I trade only with long-term trends, I never trade intra-day (I don’t even look at intra-day charts), I pyramid all winners and use 2 x ATR20 for a stop-loss, with a 1% position size.

[yamarkets]

It is important to decide the following thing first.
"Would you like to trade or to invest"
For both you have to be see previous market of currency. So that you can decide for the currency pairs for making profit.