Forex is one of the largest and most extensively traded industry in the entire world. According to a survey, the daily trade of Forex is more than $5.3 trillion. In the Forex market, the future trends of traded currencies can be projected by taking a short-term or a long-term point. Further, it is speculated that the paired currencies will go either up or down over time.
US dollar is the most prevailing and major currency which is always paired with the other currencies. There are seven currencies, which occupy approximately 80% of the trading volume in Forex trading. The major currencies with their pairs are mentioned in a table below, which includes the US dollars, Euros, Australian dollars, Canadian dollars, pounds, Yens, and Swiss Franc.
“The combination of world currencies will result in massive benefits.”
It is always very difficult to trade in the Forex market as at the start of any trade point, the traders lose their investments. Nevertheless, with the implications of the right strategies, practices, and knowledge, accomplishments can be achieved in this industry.
Therefore, the question arises here “what are the Forex currency pairs? Which currencies do fall under major and minor pairs?”
The quantity of money, which you have gotten, do not matter. The only thing that matters is how you deal with your money, as there are two categories of people, the one who saves and the one who lost.
Forex Currency Pairs:
As discussed earlier, the most widely used and traded currency is the US dollar and this is not a surprising fact, as the US dollar is the most powerful currency among all other currencies that are traded in the Forex market. Moreover, the reason for the strength of the US dollar is the huge and perpendicular size of the US economy, which occupies the world’s largest economy. The most preferred traded currency and the dominant reserve currency is the US dollar in the world.
Usually, money is traded in pairs against the other money. Each pair of money or currency is mentioned in pips, which is a percentage in points.
Due to the economic conditions, geographical risks and uncertainties, and other trading factors, the prices of each currency fluctuate.
Major Currency Pairs: When there is a concern of a major currency pair then it is hard to list down the specific pairs of currency. On the other hand, when people think of major pairs of currency then they refer to those currencies that are actively and widely traded in the Forex market with their high liquidity. But these currencies don’t need to be the most successful traded currencies. The currency is divided into two heads; major currency pairs and minor currency pairs
Euro vs US Dollar EUR/USD
British Pound vs US Dollar BP/USD
US Dollar vs Japanese Yen USD/JPY
US Dollar vs Swiss Franc USD/CHF
US Dollar vs Canadian Dollar USD/CAD
Australian Dollar vs U.S. Dollar AUD/USD
New Zealand Dollar vs U.S. Dollar NZD/USD
With every passing minute, the trade size between the countries always changes. Thus, the values of these major pairs of currencies always vary. The financial strength and a heavy trade volume of countries have direct associations to these major pairs of currencies and these pairs are the most unstable ones, because of the variations in the prices.
Minor Currency Pairs: As the major pairs of currencies which is mentioned in the above table, consist of the main streams of the market, there are minor pairs as well which occupy a small portion of the market. These other combinations of the currency pairs are EUR vs BP, EUR vs CHF, and BP vs JPY.
Here, the confusing thing for a new trader is that
“Which set or pair of currency should be used for trading in the Forex market?”
So, to kill this confusion, keep a rule of thumb of trading or focusing on one or two pairs of currency in mind.
Two pairs of currency that are widely used and chosen by everyone are EUR vs US dollars and US dollars VS JPY because these pairs make a heavy volume of trade on daily basis.
Currency trading is the most essential, fruitful, and very ethical. It should be continued for a longer period until you generate sound profits.