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A1 Trading

What are the Best Currency Pairs to Trade? Forex 101

January 26, 2022
A1 Trading

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.

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.

Currency pairs to trade

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.

Popular High Volatility Pairs:

  • Gold
  • US 30
  • 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.

Currency pairs to trade
USDCHF is a low volatility currency pair which makes it a great pair for new traders to trade.

Popular Low Volatility Pairs:

  • EURUSD
  • USDCHF
  • AUDUSD
  • AUDCHF

We recommend that newer traders should stick with low volatility pairs like EURUSD, USDCHF, AUDUSD, and AUDCHF. Use these pairs to help get your feet wet and test your strategy before jumping into higher volatile markets. To be even more cautious, we recommend starting on a demo account and not to put your hard earned money on the line until you have a strategy behind what you are doing.

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

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DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
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There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
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