I was taught that a trader choose focus on no more than 3 pairs to trade. Any suggestions as to which 3 are good for new traders?
I don’t concentrate on 3 pairs but it would not hurt if you do. I only concentrate on major USD pairs. AUDUSD, EURUSD, GBPUSD, NZDUSD, USDCHF, USDJPY, and then there is USDMXN with is pretty liquid as well but it’s considered an exotic pair. One lesson I learned the hard way is that I can’t trade everything, earning more and working less.
If you limit yourself to “just 3 pairs” you’re going to be missing out on trades. What if those 3 pairs are in trends/volatility cycles that are not conducive to your primary trading strategy?
I think you should not put a limit on pairs to trade. Just look for some stable currency pairs so that you get a good idea of how to trade them. In my opinion, EUR/USD, USD/GBP, USD/JPY, NZD/USD and AUD/USD are some pairs every beginner should explore. When I started trading, I tried my hands on USD/JPY and EUR/USD since I was comfortable trading them and they also went with the time frames I was using. For brokers, I used Swissquote, LCG and Fxview. They have a decent range of currency pairs.
Yes, I agree. There is no point in limiting the number of pairs you trade. Even a newbie is suggested to focus on 5 to 10 currency pairs to make use of the quality opportunities each month without it becoming overwhelming.
As per my understanding, choosing a currency pair to trade requires an individual approach depending on one’s personal preferences. For beginners, major currency pairs like EUR/USD and USD/JPY are often advised on the basis of the volatility, activity time, and cost per trade. It is up to you, whether you want to trade a single currency pair or several.
Absolutely! When I was beginning as a forex trader, I started with EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, and NZD/USD with fxview and octafx. From the very beginning, my focus was on making the most of the market and that’s what trading different currency pairs helped me with.
Forex trading is everyone’s personal business and so is the choice of the currency pairs. Trade pairs that work for you and leave those that don’t! There is no other hard and fast rule.
Check on the market conditions, your goals and then choose accordingly. Mostly, I prefer to stay with the majors though.
I’d say go for EUR/USD, USD/JPY, and GBP/USD for the simple reasons that they come with low spreads and are highly liquid. You definitely won’t wish to trade the pairs that come up with any complications.
You can start with the major currency pairs. I started with EUR/USD and as I got comfortable I added another currency to study and so on.
If you plan to do fx trading on the side, here’s a thread that can also help you out.