Which Forex Currency Pair Do I Have To Choose When Trading On The Forex Market?

Choosing the right Forex currency pair is one of the most important decisions when you are mapping your future Forex trading strategy. Although you can switch from one Forex currency pair to another one during the test phase of your trading strategy, it should be common sense of a novice Forex trader to stick with one currency pair when trading for the first time on the Forex market with a live Forex account. Later on, when the Forex trader has gained more experience, extra currency pairs can be added to the Forex strategy. In order to really understand the concept of a currency pair some vocabulary is needed:

• It is very obvious that a currency pair consists of two currencies (e.g. USD/EUR)
• The base currency of a currency pair is the first currency in the currency pair and this is the currency you want to buy.
• The quote currency of a currency pair is the second currency in the currency pair and this is the currency which tells you how much the base currency is worth in relation to the quote currency. For example, if the USD/EUR is 0.052, then you need 0.052 EUR to buy a single USD.

There are three aspects you should pay attention to when choosing a currency pair:

• The spread: It is advised to trade pairs which have smaller spreads, because smaller spreads mean higher profits
• The trend: Select a currency pair with the highest fluctuations because more fluctuation means more profit opportunities.
• The time of trading: The most profitable time on the Forex market is when the volume is the highest. Fore example, when the New York Stock Exchange opens there will be more volume for the USD meaning more profit opportunities.

When you use an automated Forex software then the software will choose the best currency pair for you. For example, the Forex Roboteer will focus on the EUR/USD currency pair, while the Forex Profit Code software will focus on all the currency pairs.

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