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What are the Best Currency Pairs to Trade?

Different markets have their own unique characteristics that may change the way you approach them. 

Low volatility vs High volatility

As a beginner trader it can be difficult to know which are the best currency pairs to trade. To help identify the best currency pairs to trade you need to understand that different markets have different behaviors. Some currency pairs tend to be highly volatile while others have low volatility. The volatility of the currency pair is important because it indicates the risk associate with that pair. Pairs with higher volatility are associated with high risk while pairs with low volatility are typically less risky.

In this lesson:

What are high volatile markets?
What Are low Volatile Markets?
What are the best pairs for beginner traders? 

High Volatility Currency Pairs

Often times, new traders gravitate to high volatility markets like gold because they seem more exciting. However, these are not the best currency pairs to trade and can be very dangerous for new traders. Traders who trade with high volatility can make a lot of money in a short period of time. But, just as you can make a lot of money trading with these currency pairs, you can also lose money just as fast (or even faster). Because of this, many new traders who attempt to trade with these currency pairs quickly drain their account.
As a new trader, we suggest avoiding these pairs altogether until you are confident in your strategy. There are a lot of things that could go wrong when you're learning how to trade and you want to avoid making mistakes on highly volatile currency pairs. Remember, our first goal as a trader is to protect our capital, don't risk draining your account trying to make money fast.

Examples of high volatility currency pairs:

XAUUSD
US30
Oil
GBPJPY

Low Volatility Currency Pairs

Currency pairs with low volatility are pairs that move less aggressively and are more forgiving. These types of currency pairs are much more suitable for newer traders. This is because when a new trader makes a mistake, which will inevitably happen throughout the learning process, it will not drain their account. For example, a trade on a currency pair like EURUSD which goes against you may put you down 30 pips in a span of 5 hours. While in that same time frame, a GBPJPY trade that goes against you may put you down 120 pips.
What are the Best Currency Pairs to Trade?
USDCHF is a low volatility currency pair which makes it a great pair for new traders to trade.

Examples of low volatility currency pairs:

EURUSD
USDCHF
AUDUSD
AUDCHF
Our recommendation for new traders
With greater reward comes greater risk. Although highly volatile markets can tempting for their potential to be big winners, they also have the potential to quickly wipe your account.
That being said, we do not recommend highly volatile markets to new traders. As a new trader, it will take time before you'll be consistently making more than you're losing. Don't let one big loser take you out of the game. Take time to build a strategy you're confident in before trading these markets.

Forex Trading Basics: What are the Best Currency Pairs to Trade?

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