What Are The Most Traded Currency Pairs In Forex? | Everything Trading

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What Are The Most Traded Currency Pairs In Forex?

Jan 4, 2019 | Blog

What Are The Most Traded Currency Pairs In Forex?

 

There are many new traders that ask an all too common question – “Which currency pair should I trade?”. There is no one who you can rely on or nor should you to tell you which pairs to trade or indeed which ones will make you money over the long term. Unfortunately no one has that crystal ball! Different currency pairs trade in different ways and a traders style also dictates what currency pair/s that they should trade. Without giving you a definitive answer on exactly which currency pair you should trade, what we can do is direct you to the currency pairs that trade the most by looking at surveys of central banks and authorities of major global regions to get an idea.

 

Here at Everything Trading we have ranked in order what we believe are the most active currency pairs and ones that all traders should consider when getting into the forex market

  1.   EUR/USD
  2.   USD/JPY
  3.   GBP/USD
  4.   AUD/USD
  5.   USD/CHF
  6.   USD/CAD
  7.   EUR/JPY
  8.   EUR/GBP

 

 

The EUR/USD is the most active (highest trading volume currency pair) by some distance. Think about this, you have two of the biggest economies running shoulders with the European and United States economies. These two currencies exchange hands in huge volumes every second. The EUR/USD pair trades something like 50% more volume than the GBP/USD and USD/JPY combined which gives you some indication into its sheer daily volume!

 

 

Which Forex Pairs should I trade?

 

The most traded currency pairs are generally the most active and these are ideal for short term traders due the mass volumes. As these pairs are so active the cost of trading tends to be lower which reduces costs for a short term trader as the bid/ask spread which a brokerage charges tends to be lower. Therefore the EUR/USD, GBP/USD and USD/JPY tend to have the lowest trading cost as they have tighter spreads and can be ideal for a shorter term trader.

Longer term traders tend to be less cost sensitive and may trade most exotic currencies. As there is not as much liquidity within these currencies then the moves can be more sudden once big price levels are broken. Trading the forex pair that is right for you really depends on your times frames and if you are looking for short sudden movements as opposed to slow burning longer term trend moves.

Which currency pair you trade can also be dependant on the time of the day that you are trading which is usually dependent on a traders location.

 

 

London Based Traders

London has the highest volume of forex transactions within all the major financial centres worldwide. Here are the most active currencies by volume and all coincide with London time:

  1.      EUR/USD
  2.      GBP/USD
  3.      USD/JPY
  4.      AUD/USD
  5.      USD/CHF
  6.      EUR/GBP
  7.      USD/CAD
  8.      EUR/JPY

 

 

US Based Traders

New York is the second most active financial centre for forex trading. Here are the most active pairs for this region:

  1.      EUR/USD
  2.      USD/JPY
  3.      GBP/USD
  4.      AUD/USD
  5.      USD/CAD
  6.      EUR/JPY
  7.      USD/CHF
  8.      EUR/CHF
  9.      EUR/GBP

 

There are a couple of non-major currency pairs that are also active during NY time zone. These are USD/MXN ad USD/BRL which should also be considered during this time zone.

 

 

Tokyo

Here are the most active currency pairs in the Japanese market. For obvious reasons the USD/JPY is most active and does about three to four times the volume of the other currencies.

  1.      USD/JPY
  2.      EUR/USD
  3.      EUR/JPY
  4.      AUD/USD
  5.      GBP/USD

 

 

Australia

Trading is much slower during Australian time zone as many of the big European and American institutions are closed resulting in slower volumes. When volumes are slower, many currency pairs tend to have more predictable moves and do not explode to the upside or downside so breakout strategies are much rarer! Currencies tend to stay much more range bound. Predicatbly the most active currency pair is the AUD/USD and during Australia trading hours the AUD/USD tends to be around four times as active as the EUR/USD.

  1.      AUD/USD
  2.      EUR/USD
  3.      USD/JPY
  4.      GBP/USD
  5.      USD/CAD
  6.      EUR/JPY
  7.      EUR/GBP
  8.      USD/CHF

 

 

We hope that gives you some insight into what are the most traded currency pairs around the world and helps you choose which currency pairs that you should focus on to trade! We’d love to hear your comments and if you feel any differently!

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