Photo Credit: i.imgur.com
If you are a first time FX trader, apart from following various tips that are dealt with extensively in write ups on forex trading for beginners, the currency pair that you trade in the initial days also determines how successful you can be. Why choosing the right currency pair for amateurs is crucial in FX trading? It is undoubtedly important because if you select the right currency pair to trade and you gain from there then not only you earn profits but also your morale gets a boost. Therefore, the next time when you trade, you can do so with a renewed strength. In this article, we will examine few currency pairs that can be traded by the first time traders or beginners.
In most of the cases, it is observed that FX traders are too busy selecting the trading platform and broker on the basis of infographic information they provide and also online tutorials they offer for their prospective and existing clients. (It may be mentioned here that ETX Capital is one of the better known FX brokers that has made its mark in this field, owing to the excellent services it offers to its clients). But one of the most important features that you ought to take into account is the currency pair that will work best for you when you are ready to take the plunge.
EUR/USD, known as one of the most traded currency pairs across the globe, is favourite among the FX traders because it can be easily liquidated and also its cost of trading will be low. However, if you do not like taking risks, you can avoid trading with this currency pair as it is regarded as volatile and unpredicted.
This particular currency pair is known as “Cable”. The movement or trading outcome of this currency pair is determined by any major socio, economic and political changes or events that take place in the country or in other parts of the globe that impact the performance of this pair of currency. Ideal for traders that prefer to stay in the market for a shorter period, it is considered as appropriate for such traders as it generates strong signals prior to the setting in of any major trend.
Following right at the heels of EUR/USD currency pair in terms of popularity, it is regarded as an ideal FX trading pair for the beginners. This pair is also influenced by any major or minor event that takes place around the globe. As far as a beginner is considered, it is regarded as appropriate only if the trader has traded with other currency pairs or has a thorough understanding of the functioning of the FX market and its trends.
In a nut shell, it can be said that apart from expertise/skill, luck, instinct, thorough understanding of the underlying concept, and affordability (investment amount), the dynamic conditions of the FX markets around the globe influence the outcome of a particular trade too. It all depends on how a particular trading day is destined to be in your case.