Trading forex currency pairs

By: Geo28 Date: 23.05.2017

Two common questions that I get from aspiring forex traders are: There are three categories of currency pairs; majors, crosses, and exotics. We are also including silver and gold in this list since they are quoted in U. First off, many of the major currency pairs are correlated in their price movement, meaning they move almost identical to one another. For example, the EURUSD and the GBPUSD tend to move in the same general direction not exactly the samethe GPBUSD is typically a bit more volatile than the EURUSD, but if the EURUSD is in an obvious up or down trend you can safely assume the GBPUSD is in the same trend, thus we say they are positively correlated.

The USDCHF is negatively correlated to the EURUSD, so if the EURUSD is moving higher the USDCHF is most likely moving lower. You will find if you take a EURUSD chart and a USDCHF chart of the same time frame and hold one right side up and one upside down, they will look fairly similar, this is because they are negatively correlated. So what does this correlation business mean to you? It means you need to be careful when making your trading decisions so as to not double up your risk or trade against a position you currently have open.

For example, if you enter a long on the EURUSD and the GBPUSD, you are basically doubling your risk, and there is really no point in trading both at the same time, you might as well trade one or the other, if there is a similar price action setup on both, pick the pair that the setup looks more defined on.

Similarly, if you enter a long position on the EURUSD and a short on the USDCHF, you are essentially doubling your risk. I have found the USDCHF to be very choppy compared to the EURUSD and GBPUSD, and I rarely trade the USDCHF as a result, I aim my focus on the EURUSD and GBPUSD if I want to trade a European currency against the U.

This is not to say you should never trade the USDCHF, but just be advised that in my experience the EURUSD and GBPUSD provide better price action trading opportunities. The EURUSD is also the most widely traded pair, and therefore it carries the highest volume of all currency pairs, this also means it is the most liquid, which is another reason I prefer it over its correlated counter-parts. A commodity currency is a name given to currencies of countries which depend heavily on the export of certain raw materials for income.

Now, I am not advising traders trade all of these crosses, there is certainly a short-list of the crosses that I trade and that I recommend all my students trade. That short-list looks like this: These four cross pairs are the most widely followed and make a nice addition to the major pairs mentioned above.

Here is a list of some of the more commonly traded exotics:. The exotic currency pairs are not the best place to start as an aspiring forex traderI still do not trade them and there are reasons why. The exotics are much less liquid than the majors and even the crosses. Essentially, the spread means you are negative on a trade from the beginning, so you must overcome the spread to get into profit, no sense in purposely putting yourself in the hole 15 or 20 pips by trading the exotics when you can trade the majors and only be 1 or 3 pips negative.

Put the odds in your favor. There simply is no real reason to worry about or trade the exotics, the majors and crosses provide you with more than enough price action trading opportunities to have a successful trading career. Traders who attempt to trade the exotics often get caught up in analysis-paralysis and are likely guilty of over-trading, they are certainly more susceptible to over-trading.

trading forex currency pairs

Bottom line; ignore the exotics. Metatrader 4 has many little nuances that a lot of traders are unaware of. Here are the instructions to create a market watch list and a pop up price list in MT You can save multiple watch lists if you want. Now, the pairs that I recommend you include in your watch list are the following: This gives you 10 different currency pairs to follow, more than enough to trade with. You really should pick your favorite 4 or 5 of these and follow them very closely and master one forex trading strategy at a timeonce you progress you can add all 10 currency pairs to your watch list.

Remember to stay patient and avoid over-analyzing, over-trading, and over-leveraging. Stick to these core currency pairs and master my price action trading strategies and you will be well on your way to becoming a successful Forex trader.

Thanks for some other informative blog. Where else could I am getting that type of information written in such an ideal approach?

trading forex currency pairs

Hi Niail, this is another great post from you. You have tremendously helped me on my journey. I just need to make a suggestion, that you recommend a maximum of 2 Pairs for beginners and especially people who find it difficult to multi-task, from my experience trading more than 2 Pairs makes me over trade and lose focus, which can negatively affect your account. Please include that as a warning.

What Are the Major Forex Currency Pairs and why should you trade them

Thanks and keep doing the good job. Stay away from USD TRY for shorter term stuff is my advice!!! I was having an amazing day until I placed a trade with that pair. Still well into profit… but its taken the icing well off the cake!!!!!! Nail, great and to the point. Is there anyway you can give me an idea of the best times or sessions to trade your recommended pairs in. Hi Nial, I have just discovered your site and it looks really good.

It is a straight talking no bull communications vehicle and I am impressed. I Best Wishes and thank you, I will be checking out your site on a regular basis. But i dont like whipsawings at all… more reliable trend is always better for me. Thank you very much for the useful information. I really thank you for all your help. Thank you for sharing your expertise!! What is a good pair to trade when I go long either one of the above to trade short in order to catch opportunity at the same time.

I only trade 2 pairs at one time. Thank you in anticipation of your advice!! Thank you very much, your article is really one of best in providing practical information and knowledge. The articles are very enlightening! Could you help me with risk management? I think that is fine.

But i would like to know what would be a good percentage to take profit. Thank you once m! This is a good one, Nial. Great article Nial, very useful especially for beginners. Having said that I can not find the silver and gold. I will have to go through the manual I guess: If you could specify the correlation between EURUSD and the pairs you suggest i. Thank you more than expected. This is one of the best site i visited since i started my journey into the world unlimited money.

Thanks for the help and I will def recommend your advise to anyone getting into trading for the first time. Wonderful, this has giving me great direction. I like to backtest my methods and this has just saved me a plethora of time.

Thank you soooo much. Great explaination too- as always. Keep up the good work. Neil I like your information a lot. I am trading for a long time now and I am all over the place with my thoughts and actions.

Following your guidelines and lessons I can suddenly find even more pleasure in trading.

trading forex currency pairs

I can see the trees from the forrest so to speak. I am 6o and you are 20 so I use your young cleverness to supplement my bit of accumulated wisdom. Planing to get your Forex Course. Regards Hansjoerg Balzer — Brisbane Australia.

What is Forex: Buying And Selling In Currency Pairs -

Gracias Neil, como siempre tus articulos son excelentes y de gran ayuda para todos los que estamos aprendiendo. This is one of the best site I ever seen on FX trading. I am reading every one tourist currency rates indian rupee your articals and all are excellent. This one will stop me from jumping like Thomas said above.

Keep up the good work!! Learning a lot from you videos and articals. Thanks for all your efforts. Its taken a long time to turn forecasting stock market volatility using non linear garch models thinking around that less charts mean more best money making rsbot, and not the other way around!

Hi Nial, thanks stock market questionnaire sample lot, that was a great article. How much money does a cna make in new york was actually begin to see the relation beetween some pairs, cross related and counter cross related, now all is clear: Dear Nial Thanks for you info philippine stock online brokers EURCHF and GBPCHF?

Hi Nial, what I can say is that you do a great job, I already started to complete my currency list, as before I was watching more than 20 at a time stupid, for a beginner.

Thank you for the great info! Its always the Truth good or bad for my ego it is the truth. So again Thank You Nial trimax. Great article for newbie but i knew most of facts specially correlation and risk doubling. But great to understand commodity currencies. I have made list as recommended. Thanks a lot for sharing this valuable information, Thing are more clear and also interesting,And increased the chances of doing right trades … thank you Nail.

I always wondered about the coralation between certain pairs. I agree with you, having opened positions both long, or both short with two positively corelated pairs would double your risk, but in the mean time it would double trading forex currency pairs profit chances as well: Just my humble opinion…. Thanks a lot for giving us a very helpful advise on selecting the right currencies pair to trade.

Thanks for this revelation. It makes a lot of sense for a trader to restrict himself to a few invest in kenya stock market that are not only liquid but also have some degree of predictable market pice action that will allow for simple analysis.

Thank you Nial, another great article with info. I can really use. Very happy to be your student! I was always wondering about how currencies inter-relate. Thank You Nial for taking the time to explain this aspect. Splendid again Nial, like others i anxiously await your follow up lesson. I wonder if you or any of your followers have created a flow chart of the most common basics one should be considering prior to, in and after placing a trade. It strikes me that there is such a lot of information to grasp and understand from a holistic perspective through to identifying specific risk ration,entry, exit and mosin nagant custom stocks management.

I am starting to prepare a flow chart for this purpose. Thanks for all your shared wisdom. Thanks for your great articles. I am just starting out and am enjoying absorbing everything, every time I read something of your my thinking moves along — love it! Looking forward to doing your full course soon. Hi Nial This information is hard to find all in one place so I have printed it out for reference. I know I am watching too many currencies at once, so this has again spurred me on to reduce the number.

Thank you so much Wendy. Another great an timely insight to trading,everyone has to work out in their own mind how to trade and everytime I seem to be working out something You seem to bring out an article reinforcing my theories.

I did not know the euro trading volume was that high. Also your advice on starting on daily timeframes is spot on as it helps to stop overtrading to start with and also teaches patience which I think is so Important,along with position sizing.

Nial, Thank you very much for your lesson!! Waiting for the following lesson!! I am finding that on the 4 hour charts on most pairs, the best price action occurs at the 8: In my case, it would mean having to get up at 2 in the morning to make a trading decision on this pinbar.

Can you address whether or not you find the best pinbars at certain times of the day on the 4 hour chart? Hi Nail, Another great insight into forex.

Anyway this confirm my watchlist. Many thanks for your commitment and support to all. Have a restful weekend. I had mess of charts I was looking at.

No exotics, but far more than ten. This simplified my trading in epic proportion! When I first started trading 2 years ago, I used to look at over 20 pairs 22 to be exact because I figured the more pairs I looked at, the more chances I had to trade and make money but the exact opposite was happening.

I was overtrading and losing money. With this bit of insight I can now concentrate on only 10 that will increase my odds of being in better trades. This article was a tremendous help Nial. Nial, thanks for writing and sharing this article. Look forward to part two as one of my big issues is the times to trade — just cant get a handle on that. Thanks for this excellent information.

Though you may how much money do they get for honey boo boo fully realize it, your efforts are really touching many lives. Thanks, I wish you well for this article today, you are very good to help others. God will always bless you. How active stock market quotes msn money wish every man comming to forex trading will first learn your trading system and course before doing any thing else.

I agree with you, however, I think it is a good strategy to at least look at some of the other pairs especially when there are mixed signals with highly correlated pairs.

Currency pairs, spot metals and CFDs | instruments for Forex trading

It helps it detecting when banks are stop hunting especially around large whole numbers. I just basically trade the Eur Usd But what are your thoughts on Gold and silver? Do you think this upward trend is still intact for some time? Nial, I have followed your E-mails for awhile, thanks for the info, it is always interesting and informative. Been Forexing for about 14 months. Not great, but enough to start to make some money.

I should retire in about 1 year, then will devote more time to Forex. Most likely will take your course before that time. It is never too late to learn. Trying to decide which indicators I like the best. I only use two indicators at a time.

This is getting kind of long, so I will sign off. Just wanted to let you know how much your info is appreciated. Have a good day. I was in New Zealand 38 daysAustralia 7 daysinOperation Deepfreeze.

You have a beautiful country and friendly people. Hope to visit when I retire. Just apply risk reward. When I used to try trading it I usually ended up scratching my head with less money in my account. I agree with you, stay away from that pair. Great article, I really needed this. One of the things I like about your articles and approach, is the level of relevancy. Can always count on you for some solid and honest advice.

I just thought I will give you my favorite watch list: Nial, Thank you for your investment in us. Your forthright manner is most refreshing and your presentations are helpful and appreciated.

Just revised my watch list and charts…: Indeed… i was hoping for someone to give me a better insight and consolidation of the forex markets tradable pairs! Thank you very much Nial, I have only been looking at cable, but having had a look at some of the pairs you have suggested I can see other possibilities, thank you very much.

Two quick observations, since the decoupling of the eur from the chf, and the chf becoming the preferred safe haven currency in risk averse conditions. It tends to trade a lot, consequently GbpChf,Eurchf are good pairs to trade made a lot of money on gbp chf daily chart trading. Good on you for making those trades, well done.

Thanks for your daily training courses What about EURCHF and GBPCHF? Am very happy for today post,i believe this one will give me another guardline to trade my demo account successfuly. Very concise and helpful information. Thanks for your sincere desire to help us. This is what I need right now. Its amazing how easy your strategies are but only after you shared them… keep up the good work!

Fantastic, practical advice Nial! Your list is very similar to mine. I am sure this article will be very useful to me in my trade! Very good insight Nial. Hi, i got it but new trader must compute position size n different way compared to currency pairs. Thanks for a good stuff. Very good one as always. This give me a good picture of what has to be traded and what has to be avoided. Good one keep it up. Your email address will not be published.

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Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Part 1 By Nial Fuller in Forex Trading Strategies Comments. Types of Currency Pairs: Here is a list of some of the more commonly traded exotics: Create your own forex currency pair watch-list: Here are the instructions to create a market watch list and a pop up price list in MT4: Screen shot of my market watch list: Now I want to hear from you!

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