As a new starter what are the main/best four pairs to trade in??
As a new trader pick just one. Looking at multiple pairs will confuse you. It’s best to learn one pair and internalize it’s moves first.
A couple of criteria you should be looking for is:
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spread. A spread that works for your timeframe of trading. If you are scaping for few pips you want the lowest possible. Also, even if youaren’t scalping a pair with large spread isnt’ recommend as it’s hurts your losses more and makes it harder to win.
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volatility/movement. When starting out you want a pair that moves enough where watching it isn’t like watching paint dry, but not so fast it’s too fast.
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Market condition. Is the pair: trending, rangebound, or in consolodation. If you are curently working on trending strategies look for a pair that is currently trending.
Once you get comfortable with one pair and have a decent stragy it’s time to move on and get some more pairs. what more pair will do at this point is let you look for your favorite market condition and avoid condition you don’t like trading. For instance if you only want to trade a strong trend, you can open up all the pairs until you find a trend and reject pairs that aren’t in a strong trend.
Hi ThePhoenix,
Thanks for that i did think that about just watching one but thought by doing that i could be missing out! i think ill go with GBP/USD
GPD/USD is my favorite and a lot of other traders too. Good action, not too much of a whipsaw on a good day.
I also like GPD/USD. I have tried EUR/USD but I make less pips, not sure why but for now I’ll stick with what works.
I also like eur/jpy, great action and not too “expensive” I think. One of the majors that i really don’t like to trade is the usd/chf. I think that it gives some wrong signals many times.
I can understand “liking” certain pairs over others because they can behave very differently, but personally I try not to view any pairs like this. Sure, some have cheaper transaction costs, but I prefer to view it more in terms of conditions. Conditions can change drastically on any pair from one day to the other. Personally I think that as traders we should know what it is we like to see a pair doing, and how we like it to behave, and then let the market come to us. Just my two cents.
I think it is interesting that you do not like the USD/CHF. Personally I like it very much for short term scalping but agree longer trades are difficult. I made 30 pips off it this morning in two quick trades that were perfect set ups that I never see in gbp/usd or eur/usd. I think most thing in picking a pair is determine what kind of trader you are and what pair fits your chacteristics well.
This advice makes sense for short-term traders. For folks with a less short focus, however, more pairs are required to generate sufficient frequency of analysis to gain experience and enough trading opportunities. Basically, as you go from scalping and day trading out toward long-term position trading you should increase the number of pairs from just one to pretty much all of the majors and major crosses.
EURUSD is th best for a newbie. IMHO.
I’ve been thinking about this myself… I want to stay diversified and trade multiple pairs from a purely technical standpoint and it makes no sense to me trading eur/usd and gbp/usd… What pairs would be the least correalated? and having a somewhat small spread?
There really isn’t any such thing as diversification in the forex market, at least not in the way most folks thing of diversifying a portfolio by having different mainly uncorrelated positions. Just look at the charts for the pairs after the Fed statement yesterday. The forex market is highly inter-locked and especially responsive to what’s happening in the USD.