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Which currency pair is best for day trading?

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Which currency pair is best for day trading - forexspacex.com

How many forex pairs should I monitor? There are literally dozens of pairs out there. Should we follow just the most traded currency pair or focus on the top five currency pairs? So, in today’s guide, I will be talking about the best forex pairs for day trading as per my experience.

The forex market is so subjective and every trader and the market participant has their own opinion about strategies and currency pairs depending on the time zone they trade. However, there is one golden rule- never get married to a single currency pair. Many beginners get attached to a single currency pair and then they try to trade the same pair in all the environments like when the Price action is choppy or it is trending or even when the pair is consolidating in a narrow range. This is very risky and must be avoided.

Should a trader focus on a basket of currencies or just one particular currency pair?

It really depends. If you are an active trader, then you must focus on a basket of currencies. However, trading an individual currency pair on an economic data report has multiple benefits. The risk-to-reward ratio can be very high during economic events.

How to evaluate a currency pair for trading?

The methods are all mechanical. Open only three Pairs, EUR/USD, GBP/USD, and USD/JPY. Draw conclusions on an hourly chart using your own specific trade setups.

Most traded currency pairs by volume

#Currency PairVolume, %
1EURUSD27.95%
2USDJPY13.34%
3GBPUSD11.27%
4AUDUSD6.37%
5USDCAD5.22%
6USDCHF4.63%
7NZDUSD4.08%
8EURJPY3.93%
9GBPJPY3.57%
10EURGBP2.78%
11AUDJPY2.73%
12EURAUD1.8%
13EURCHF1.73%
14AUDNZD0.96%
15NZDJPY0.93%

Why choose GBP/USD for day trading?

GBP/USD is one of the most liquid currency pairs and almost all the market participants are familiar with this pair. GBP/USD is best for day trading as well as swing trading.

If you analyze the daily chart of GBP/USD, you will be able to see how nicely this currency pair trends and respects the majority of moving averages and technical indicators like relative strength index indicator or stochastic oscillator.

Why one must avoid trading a single currency pair?

The currency pairs mostly consolidate in a range-bound environment for about 60% of the time. It is very challenging to trade in a range-bound environment. However, the forex market provides a ton of opportunities during major economic events. So, if a trader is only trading a particular currency pair, then the chances of opportunity being lost are high.

Final thoughts

Many traders prefer to trade in highly liquid currency pairs when day trading. GBP/USD Is by far the best currency pair for day trading as it is highly liquid and performs really well during volatility expansion. Since the spread is also low, so we spend less.



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