Best forex pairs to trade 2014
This type of liquidity guarantees that you are going to profit from price changes. This adds to the liquidity as this is typically when the highest amount of Forex trading is taking place. Any currency that is considered to be exotic or uncommon should be avoided by new traders. In some instances the financial state of the country is too unstable to be able to read the charts properly.
For others, there just is not enough information available to you. A new trader needs to use as many resources as possible before placing a trade. Unless you have some first hand knowledge of Guatemala and its future financial state, you should stay far away from trading the uncommon currencies. Pick one of these currencies, pair it with the USD and then begin to study how that combination works. This is the best way for a new trader to learn how to formulate strategies by using a strong currency pair that has a lot of information available.
A new trader is advised to stay away from currency pairs that have a wide spread. This is the difference between the bid and ask prices. Those with high spreads tend to be more volatile, with long periods when the price will spike.
This type of movement is harder for a new trader to manage with success. The spread should be easily read on the trading platform, but if not you simply need to subtract the bid price from the ask price. Traders should start off by trading in one pair only and becoming an expert in it before moving on to another.
It is a good idea to have at least two pairs to look at when actively trading in case that one is not working with your strategy at the time, but that comes later, for now just pick one and learn it well. It is my opinion that this is the absolute best place for a new trader to start. These two currencies historically have the lowest spread in the market, making it one of the least volatile.
It also responds properly in respect to all of the rules and indicators that you have been learning about. When one pair loses volatility while another gains, I might switch my favorite from the first to the second.
Back in mid, this pair saw its daily ATR rise from a pleasant pips a day to a day! The Swiss central bank flipped the switch, and caught many off guard. Still, not good enough for my money! My recommendation in class is to stick with one major currency versus another major currency. A few JPY pairs: A few GBP pairs: And a few EUR pairs: So now I have a short list of pairs to keep an eye on, and a few to avoid for now.
In my weekly to-do list, I go through this exercise to see which pairs I should start to focus on and which to avoid. You do have a to-do list, right? My weekly list includes checking the daily ATR, checking an economic calendar for major events like interest rate decisions, etc. Hopefully this newsletter helps you avoid some of the quiet pairs, and get you focused on the pairs that have some pips in them! Disclaimer This newsletter is written for educational purposes only.
By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein.